CarMax Faces Class Action Lawsuit Over Loan Losses, Stock Plummets 44.4%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
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Source: Globenewswire
- Lawsuit Initiation: A securities class action lawsuit was filed on December 23, 2025, against CarMax for misleading investors regarding the underperformance of 2022 and 2023 vintage loans, impacting all purchasers of the company's securities between June 20 and November 5, 2025.
- Financial Missteps Revealed: The complaint alleges that on September 25, 2025, CarMax reported weak fiscal Q2 2026 results due to tariff-related demand pull-forward, leading to excess inventory and increased depreciation expenses, causing a 20.1% drop in stock price.
- Executive Changes Impact: Following the termination of CEO William Nash on November 4, 2025, and warnings of a sharp decline in used-car sales, CarMax's stock fell an additional 24.3%, resulting in a total decline of 44.4% during the class period.
- Investor Rights Reminder: Investors are urged to contact the law firm before the January 2, 2026 lead plaintiff motion deadline to ensure their rights are protected in the class action lawsuit.
KMX
$39.41+Infinity%1D
Analyst Views on KMX
Wall Street analysts forecast KMX stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KMX is 40.92 USD with a low forecast of 27.00 USD and a high forecast of 60.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
2 Buy
12 Hold
3 Sell
Hold
Current: 38.450
Low
27.00
Averages
40.92
High
60.00
Current: 38.450
Low
27.00
Averages
40.92
High
60.00
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.
