KMX Should I Buy
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CarMax Inc (KMX) is not a strong buy at the moment for a beginner, long-term investor with $50,000-$100,000 available for investment. The company's financial performance is declining, and there are no significant positive catalysts or strong trading signals to justify an immediate purchase. While hedge funds are buying, the lack of recent news, weak financials, and mixed analyst ratings suggest a cautious approach.
The MACD is positive and expanding (0.131), indicating a potential upward trend. RSI is neutral at 56.986, and moving averages are converging, showing no clear trend. The stock is trading near its pivot level (42.096), with resistance at 43.585 and support at 40.606. Overall, the technical indicators are neutral to slightly positive.
Hedge funds are increasing their buying activity, with a 179.34% increase in the last quarter. The MACD is showing positive momentum.
The company's financial performance in Q3 2026 shows a significant decline in revenue (-6.90% YoY), net income (-50.40% YoY), EPS (-46.91% YoY), and gross margin (-8.73% YoY). Analyst ratings are mixed, with some price targets below the current pre-market price. The stock has a 70% chance to decline in the next week (-2.93%).
In Q3 2026, CarMax reported a revenue drop to $5.79 billion (-6.90% YoY), net income fell to $62.2 million (-50.40% YoY), EPS dropped to $0.43 (-46.91% YoY), and gross margin decreased to 8.99% (-8.73% YoY). These figures indicate a significant decline in the company's financial health.
Analyst ratings are mixed. Evercore ISI raised its price target to $39 and $42 in recent months but maintained an In Line rating. Baird raised its price target to $48 with an Outperform rating. Barclays raised its target to $28 but kept an Underweight rating, citing soft auto sales. Overall, analysts have differing views, with no strong consensus for a buy.
