CarMax Faces Class Action Lawsuit Over Misleading Statements, Investors Suffer Losses
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Globenewswire
- Class Action Initiated: Bragar Eagel & Squire law firm has filed a class action lawsuit against CarMax in the U.S. District Court for Maryland on behalf of investors who purchased securities between June 20, 2025, and September 24, 2025, reflecting significant investor dissatisfaction with the company's misleading statements.
- Financial Performance Decline: CarMax reported a 6% year-over-year revenue decline and a 7.2% drop in retail used vehicle revenues in its Q2 2025 earnings report, indicating severe market challenges that could undermine future investor confidence.
- Stock Price Volatility: Following the release of its earnings on April 10, 2025, CarMax's stock plummeted by 17% to close at $66.45 per share, demonstrating market pessimism regarding the company's outlook and exacerbating investor losses.
- Legal Implications: Investors must apply by January 2, 2026, to be appointed as lead plaintiffs in the lawsuit, signaling strong opposition to the management's misleading statements and potentially exposing the company to greater legal and financial risks.
KMX
$39.17+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: 39.270
Low
27.00
Averages
40.92
High
60.00
Current: 39.270
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.
