KMX Should I Buy
-
$
0.000
0.000(0.000%)
At close0.000(0.000%)Aft-market
ET
Loading...
CarMax Inc (KMX) is not a strong buy at the moment for a beginner investor with a long-term strategy. The stock is currently facing significant challenges, including declining financial performance, bearish technical indicators, and negative sentiment following the announcement of a new CEO. While hedge funds are increasing their positions and the options data suggests a relatively neutral sentiment, the lack of strong positive catalysts and ongoing margin pressures make this stock a hold rather than a buy.
The technical indicators for KMX are bearish. The MACD is negatively expanding (-0.596), the RSI is at 23.009 (neutral but close to oversold), and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading close to its support level of 41.439, with resistance levels at 44.465 and 47.49. Overall, the trend suggests downward momentum.
Hedge funds are increasing their positions, with a 179.34% increase in buying activity over the last quarter. The used vehicle market shows some momentum, according to Barclays.
The announcement of a new CEO led to a 12% drop in stock price, reflecting investor dissatisfaction. Financial performance in Q3 2026 showed significant declines in revenue (-6.90% YoY), net income (-50.40% YoY), and EPS (-46.91% YoY). Analysts have mixed to negative ratings, with several lowering price targets due to margin pressures and low visibility on volume recovery.
CarMax's Q3 2026 financials were weak, with revenue dropping to $5.79 billion (-6.90% YoY), net income falling to $62.22 million (-50.40% YoY), and EPS declining to $0.43 (-46.91% YoY). Gross margin also fell to 8.99% (-8.73% YoY), indicating ongoing challenges in profitability.
Analysts have mixed to negative views. Evercore ISI recently raised its price target to $42 but maintained an In Line rating. Barclays and JPMorgan have Underweight ratings, citing margin pressures and low visibility on recovery. Other firms like Wedbush and Truist highlight near-term challenges but acknowledge long-term strategic moves.
