CarMax, Inc.KMX
NYSE•Consumer Cyclical•Auto & Truck Dealerships
CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. The company operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; used vehicle auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services. The CarMax Auto Finance segment provides financing alternatives for retail customers across a range of credit spectrum and arrangements with various financial institutions. The company was founded in 1993 and is based in Richmond, Virginia.
CarMax Inc (KMX) reported trailing twelve months revenue of $25.88B as of February 2026, a 1.8% decline year-over-year. Quarterly revenue reached $5.95B, reflecting a contraction in sales.
CarMax Inc generated $247.29M in TTM net income, with quarterly EBITDA of $-24.52M. The operating margin contracted from 1.7% to -2.0%, suggesting rising cost pressures or pricing headwinds.
The spread between operating margin (-2.0%) and net margin (-2.0%) indicates tight cost control with minimal non-operating drag. Net margin has narrowed from 1.5% a year ago, reflecting increased costs or interest expense.
KMX trades at a P/E of 27.2x (in line with broad market averages) and a P/S of 0.3x. The price-to-book ratio of 1.1x reflects a moderate premium to book value.
The company reported negative free cash flow of $-687.29M, indicating cash consumption over the period. The balance sheet shows $26.37B in total assets with $17.26B in long-term debt against $5.89B in stockholders equity for a debt-to-equity ratio of 2.9, a relatively leveraged position. Data based on the most recent quarterly reports.
Competitive analysis based on 21 quarters of fundamental data
Operating margins are under pressure, averaging 1.9%. The business may lack pricing power or face rising costs.'
ROE is positive at ~7.2% on average, adequate but below the threshold typically associated with wide moats.
5 of the last 8 quarters generated positive FCF. The company generally funds itself but has occasional cash consumption quarters.
Revenue has been flat or declining over recent quarters, which may indicate eroding demand or competitive pressure.
Data-driven red flags and warnings across 21 quarters
Operating margins dropped 47.9% over recent quarters — a sharp decline suggesting serious cost or pricing challenges.
FCF/Net Income has dropped below 0.7x in 3 quarters — monitor for earnings quality deterioration.
D/E ratio of 2.9 is elevated. Monitor for further debt accumulation.
Revenue is stable or growing over recent quarters — demand appears durable.
FCF turned negative in 3 of the last 8 quarters — occasional cash consumption.
Shares decreased 9.6% — net buybacks are reducing shares outstanding and boosting per-share value.