Analysis of Companies with Varied Cash Flow Performance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 03 2026
0mins
Should l Buy KMX?
Source: Yahoo Finance
- CarMax Sales Weakness: CarMax (KMX) has experienced disappointing same-store sales over the past two years, indicating poor customer response to its product selection and store experience, resulting in a gross margin of only 6%, with a current stock price of $39.15 and a forward P/E of 16.2, suggesting caution for investors.
- Matson's Lackluster Growth: Matson (MATX) has shown only 4% annual growth over the past two years, below the industry average, and a 12.9 percentage point decline in free cash flow margin over the last five years indicates increased investments to maintain market position, with a current stock price of $174.50 and a forward P/E of 12.9, reflecting declining returns on capital.
- Talos Energy's Strong Performance: Talos Energy (TALO) has achieved an exceptional 20.8% annual revenue growth over the past eight years, with a gross margin of 72.3% and a free cash flow margin of 24.4%, allowing for consistent reinvestment or capital return, currently priced at $15.93 with a forward P/E of 493.2, highlighting its market potential.
- Characteristics of Market Winners: StockStory's analysis indicates that successful stocks often share a common trait of rapidly growing revenues, as seen with companies like Meta, CrowdStrike, and Broadcom, which have all returned over 300%, showcasing strong market performance and investment appeal.
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Analyst Views on KMX
Wall Street analysts forecast KMX stock price to fall
13 Analyst Rating
0 Buy
10 Hold
3 Sell
Hold
Current: 39.910
Low
24.00
Averages
33.60
High
37.00
Current: 39.910
Low
24.00
Averages
33.60
High
37.00
About KMX
CarMax, Inc. is a retailer of used autos. The Company operates through two segments: CarMax Sales Operations and CarMax Auto Finance (CAF). The CarMax Sales Operations segment consists of all aspects of its auto merchandising and service operations. The CarMax Sales Operations segment sells used vehicles, purchases used vehicles from customers and other sources, sells related products and services, and arranges financing options for customers. The CAF segment consists solely of its own finance operation that provides financing for customers buying retail vehicles from the Company. The CAF segment also services all auto loans, it originates and is responsible for providing billing statements, collecting payments, maintaining contact with delinquent customers, and arranging for the repossession of vehicles securing defaulted loans. It provides customers with a range of other related products and services, including extended protection plan (EPP) products and vehicle repair services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Analysis of Current Auto Loan Market Trends
- Stable Consumer Burden: Despite rising car prices and interest rates, the percentage of income consumers spend on automotive expenses has remained around 10% since 2019, indicating a stable burden on consumers and reflecting market resilience.
- Trend of Extended Loan Terms: An increasing number of consumers are opting for longer loan terms to lower monthly payments, with data showing that 90.2% of new vehicle loans involving trade-ins with negative equity have terms of at least 72 months, and 43% extend to 84 months, potentially leading to higher debt risks for consumers when trading in vehicles.
- Escalating Negative Equity Issues: As of April 2023, approximately 26% of used vehicle purchases involved negative equity, with an average negative equity of $5,105, a 35% increase from 2019, indicating greater financial pressure on consumers when trading in vehicles.
- Market Price Comparison: According to Cox data, the average listed price of a used vehicle was $25,390 in March, compared to an average new vehicle price of $48,667, highlighting the relative stability of the used car market and reflecting consumers' economic considerations when choosing loans.
See More
Carvana's First Forward Stock Split Sparks Investor Interest
- Significant Price Surge: Carvana's stock skyrocketed from an all-time low of $3.72 in December 2022 to $379, reflecting a staggering 10,091% increase, showcasing the success of its online used-car sales model and attracting investor interest.
- First Forward Split: Announced on March 13, Carvana's 5-for-1 forward stock split aims to enhance stock accessibility for all team members while lowering the purchase threshold for retail investors, with an expected post-split price around $76.
- Remarkable Sales Growth: Carvana achieved a 49% sales growth last year, contrasting sharply with its main competitor CarMax's low single-digit growth, indicating Carvana's competitive edge and growth potential in the market.
- Shift to Profitability: With nearly $1.9 billion in net income last year, bolstered by tax benefits, Carvana's high valuation premium raises caution among investors, as companies with inflated valuations are often hit hardest during market downturns.
See More
Analysis of Companies with Varied Cash Flow Performance
- CarMax Sales Weakness: CarMax (KMX) has experienced disappointing same-store sales over the past two years, indicating poor customer response to its product selection and store experience, resulting in a gross margin of only 6%, with a current stock price of $39.15 and a forward P/E of 16.2, suggesting caution for investors.
- Matson's Lackluster Growth: Matson (MATX) has shown only 4% annual growth over the past two years, below the industry average, and a 12.9 percentage point decline in free cash flow margin over the last five years indicates increased investments to maintain market position, with a current stock price of $174.50 and a forward P/E of 12.9, reflecting declining returns on capital.
- Talos Energy's Strong Performance: Talos Energy (TALO) has achieved an exceptional 20.8% annual revenue growth over the past eight years, with a gross margin of 72.3% and a free cash flow margin of 24.4%, allowing for consistent reinvestment or capital return, currently priced at $15.93 with a forward P/E of 493.2, highlighting its market potential.
- Characteristics of Market Winners: StockStory's analysis indicates that successful stocks often share a common trait of rapidly growing revenues, as seen with companies like Meta, CrowdStrike, and Broadcom, which have all returned over 300%, showcasing strong market performance and investment appeal.
See More
CarMax Under Investigation for Securities Fraud Claims
- Investigation Launched: Pomerantz LLP is investigating whether CarMax and its executives have engaged in securities fraud or other unlawful business practices, indicating growing investor concerns over corporate governance.
- Financial Performance: Although CarMax's fourth-quarter results for fiscal year 2026 exceeded expectations for same-store sales and revenue, management's announcement to lower used car prices and target customers with lower credit scores reveals a strategic shift in response to the auto industry's affordability crisis.
- Stock Price Decline: Following this news, CarMax's stock price fell by $7.42, or 15.12%, closing at $41.66 per share on April 14, 2026, reflecting market apprehension regarding the company's future profitability.
- Legal Context: Pomerantz LLP, a prominent securities class action law firm with over 85 years of experience, focuses on advocating for victims of securities fraud and corporate misconduct, highlighting the potential legal challenges CarMax may face.
See More
CarMax Under Investigation for Securities Fraud Claims
- Investigation Launched: Pomerantz LLP is investigating whether CarMax and its executives have engaged in securities fraud or other unlawful business practices, aiming to protect investor rights, which could impact the company's reputation and shareholder confidence.
- Earnings Report: Although CarMax's fourth-quarter results for fiscal year 2026 exceeded expectations for same-store sales and revenue, management indicated during the earnings call that they would lower used car prices and increase acceptance of customers with lower credit scores to address the affordability crisis in the auto industry.
- Stock Price Decline: Following this news, CarMax's stock price fell by $7.42, or 15.12%, closing at $41.66 per share, reflecting market concerns regarding the company's future strategy.
- Legal Implications: Pomerantz LLP, a prominent firm in securities class action litigation with a long history, may impose significant legal and financial repercussions on CarMax, prompting investors to closely monitor further developments.
See More
CarMax Shares Drop 37% Following Earnings Report Amid Transition
- Disappointing Earnings: CarMax reported net sales of approximately $5.95 billion for fiscal Q4 2026, reflecting a 1% year-over-year decline, although this was an improvement from the 7% drop in Q3, indicating some recovery in sales trends despite overall poor performance.
- Sales Volume Improvement: Retail used unit sales fell 0.8% year-over-year in Q4, a significant improvement from the 8% decline in Q3, as management implemented price cuts and increased marketing spend to drive sales, demonstrating the company's efforts to seek recovery in challenging conditions.
- Profitability Under Pressure: Despite the sales volume improvement, CarMax's gross profit margin contracted, with total gross profit falling 9% year-over-year to $605 million, and a net loss of $121 million was reported, heavily impacted by a $141 million non-cash goodwill impairment charge, highlighting severe challenges to the company's profitability.
- Paused Buyback Program: CarMax repurchased only about $50 million of its stock in Q4 before halting the buyback program, with management citing leverage slightly above the targeted range, reflecting a cautious capital allocation approach during a leadership transition period.
See More
Analysis of Current Auto Loan Market Trends
- Stable Consumer Burden: Despite rising car prices and interest rates, the percentage of income consumers spend on automotive expenses has remained around 10% since 2019, indicating a stable burden on consumers and reflecting market resilience.
- Trend of Extended Loan Terms: An increasing number of consumers are opting for longer loan terms to lower monthly payments, with data showing that 90.2% of new vehicle loans involving trade-ins with negative equity have terms of at least 72 months, and 43% extend to 84 months, potentially leading to higher debt risks for consumers when trading in vehicles.
- Escalating Negative Equity Issues: As of April 2023, approximately 26% of used vehicle purchases involved negative equity, with an average negative equity of $5,105, a 35% increase from 2019, indicating greater financial pressure on consumers when trading in vehicles.
- Market Price Comparison: According to Cox data, the average listed price of a used vehicle was $25,390 in March, compared to an average new vehicle price of $48,667, highlighting the relative stability of the used car market and reflecting consumers' economic considerations when choosing loans.
See More
Carvana's First Forward Stock Split Sparks Investor Interest
- Significant Price Surge: Carvana's stock skyrocketed from an all-time low of $3.72 in December 2022 to $379, reflecting a staggering 10,091% increase, showcasing the success of its online used-car sales model and attracting investor interest.
- First Forward Split: Announced on March 13, Carvana's 5-for-1 forward stock split aims to enhance stock accessibility for all team members while lowering the purchase threshold for retail investors, with an expected post-split price around $76.
- Remarkable Sales Growth: Carvana achieved a 49% sales growth last year, contrasting sharply with its main competitor CarMax's low single-digit growth, indicating Carvana's competitive edge and growth potential in the market.
- Shift to Profitability: With nearly $1.9 billion in net income last year, bolstered by tax benefits, Carvana's high valuation premium raises caution among investors, as companies with inflated valuations are often hit hardest during market downturns.
See More
Analysis of Companies with Varied Cash Flow Performance
- CarMax Sales Weakness: CarMax (KMX) has experienced disappointing same-store sales over the past two years, indicating poor customer response to its product selection and store experience, resulting in a gross margin of only 6%, with a current stock price of $39.15 and a forward P/E of 16.2, suggesting caution for investors.
- Matson's Lackluster Growth: Matson (MATX) has shown only 4% annual growth over the past two years, below the industry average, and a 12.9 percentage point decline in free cash flow margin over the last five years indicates increased investments to maintain market position, with a current stock price of $174.50 and a forward P/E of 12.9, reflecting declining returns on capital.
- Talos Energy's Strong Performance: Talos Energy (TALO) has achieved an exceptional 20.8% annual revenue growth over the past eight years, with a gross margin of 72.3% and a free cash flow margin of 24.4%, allowing for consistent reinvestment or capital return, currently priced at $15.93 with a forward P/E of 493.2, highlighting its market potential.
- Characteristics of Market Winners: StockStory's analysis indicates that successful stocks often share a common trait of rapidly growing revenues, as seen with companies like Meta, CrowdStrike, and Broadcom, which have all returned over 300%, showcasing strong market performance and investment appeal.
See More
CarMax Under Investigation for Securities Fraud Claims
- Investigation Launched: Pomerantz LLP is investigating whether CarMax and its executives have engaged in securities fraud or other unlawful business practices, indicating growing investor concerns over corporate governance.
- Financial Performance: Although CarMax's fourth-quarter results for fiscal year 2026 exceeded expectations for same-store sales and revenue, management's announcement to lower used car prices and target customers with lower credit scores reveals a strategic shift in response to the auto industry's affordability crisis.
- Stock Price Decline: Following this news, CarMax's stock price fell by $7.42, or 15.12%, closing at $41.66 per share on April 14, 2026, reflecting market apprehension regarding the company's future profitability.
- Legal Context: Pomerantz LLP, a prominent securities class action law firm with over 85 years of experience, focuses on advocating for victims of securities fraud and corporate misconduct, highlighting the potential legal challenges CarMax may face.
See More
CarMax Under Investigation for Securities Fraud Claims
- Investigation Launched: Pomerantz LLP is investigating whether CarMax and its executives have engaged in securities fraud or other unlawful business practices, aiming to protect investor rights, which could impact the company's reputation and shareholder confidence.
- Earnings Report: Although CarMax's fourth-quarter results for fiscal year 2026 exceeded expectations for same-store sales and revenue, management indicated during the earnings call that they would lower used car prices and increase acceptance of customers with lower credit scores to address the affordability crisis in the auto industry.
- Stock Price Decline: Following this news, CarMax's stock price fell by $7.42, or 15.12%, closing at $41.66 per share, reflecting market concerns regarding the company's future strategy.
- Legal Implications: Pomerantz LLP, a prominent firm in securities class action litigation with a long history, may impose significant legal and financial repercussions on CarMax, prompting investors to closely monitor further developments.
See More
CarMax Shares Drop 37% Following Earnings Report Amid Transition
- Disappointing Earnings: CarMax reported net sales of approximately $5.95 billion for fiscal Q4 2026, reflecting a 1% year-over-year decline, although this was an improvement from the 7% drop in Q3, indicating some recovery in sales trends despite overall poor performance.
- Sales Volume Improvement: Retail used unit sales fell 0.8% year-over-year in Q4, a significant improvement from the 8% decline in Q3, as management implemented price cuts and increased marketing spend to drive sales, demonstrating the company's efforts to seek recovery in challenging conditions.
- Profitability Under Pressure: Despite the sales volume improvement, CarMax's gross profit margin contracted, with total gross profit falling 9% year-over-year to $605 million, and a net loss of $121 million was reported, heavily impacted by a $141 million non-cash goodwill impairment charge, highlighting severe challenges to the company's profitability.
- Paused Buyback Program: CarMax repurchased only about $50 million of its stock in Q4 before halting the buyback program, with management citing leverage slightly above the targeted range, reflecting a cautious capital allocation approach during a leadership transition period.
See More
