📊 KMX Key Takeaways
Is KMX a Good Investment? Thesis Analysis
CarMax generates strong free cash flow of $1.9B and maintains adequate liquidity with a 1.99x current ratio, demonstrating operational stability. However, zero revenue growth, extreme leverage of 2.74x debt-to-equity, and anemic returns (6.1% ROE, 1.8% net margin) indicate limited earnings power and high financial risk, making it unattractive for growth or quality investors.
Why Buy KMX? Key Strengths
- Strong free cash flow generation of $1.9B (9.7% FCF margin) demonstrates operational cash conversion despite thin net margins
- EPS growth of 6.3% YoY shows operational leverage and cost discipline despite flat revenue
- Adequate current ratio of 1.99x and positive operating cash flow of $2.3B indicate near-term liquidity stability
KMX Investment Risks to Consider
- Zero revenue growth (0.0% YoY) signals market saturation or operational challenges in a capital-intensive business
- Extreme leverage with 2.74x debt-to-equity ratio ($16.6B long-term debt on $6.1B equity) leaves minimal margin for error and limits financial flexibility
- Critically low cash position of $204.9M relative to $25.6B total assets and high debt obligations creates refinancing risk
- Thin 1.8% net margin and low returns (6.1% ROE, 1.4% ROA) indicate inadequate profitability and poor capital deployment
- Quick ratio of 0.51x shows heavy reliance on inventory conversion and liquidity pressure if sales decelerate
Key Metrics to Watch
- Revenue growth trend—must return to positive growth to justify leverage burden
- Debt/Equity ratio and absolute debt levels—assess deleveraging progress or further deterioration
- Free cash flow sustainability and cash balance—critical given low liquidity buffers
- Net margin expansion or contraction—indicator of pricing power and cost control in competitive market
KMX Financial Metrics
💡 AI Analyst Insight
CARMAX INC presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
KMX Profitability Ratios
KMX vs Consumer Sector
How CARMAX INC compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is KMX Overvalued or Undervalued?
Based on fundamental analysis, CARMAX INC shows some fundamental concerns relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
KMX Balance Sheet & Liquidity
KMX 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: CARMAX INC's revenue has grown significantly by 46% over the 5-year period, indicating strong business expansion. The most recent EPS of $3.03 reflects profitable operations.
KMX Growth Metrics (YoY)
KMX Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $5.8B | $62.2M | $0.43 |
| Q2 2026 | $6.6B | $95.4M | $0.64 |
| Q1 2026 | $7.1B | $152.4M | $0.97 |
| Q3 2025 | $6.1B | $82.0M | $0.52 |
| Q2 2025 | $7.0B | $118.6M | $0.75 |
| Q1 2025 | $7.1B | $152.4M | $0.97 |
| Q3 2024 | $6.1B | $37.6M | $0.24 |
| Q2 2024 | $7.1B | $118.6M | $0.75 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
KMX Capital Allocation
KMX SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for CARMAX INC (CIK: 0001170010)
📋 Recent SEC Filings
❓ Frequently Asked Questions about KMX
What is the AI rating for KMX?
CARMAX INC (KMX) has an AI rating of HOLD with 55% confidence, based on fundamental analysis of SEC EDGAR filings.
What are KMX's key strengths?
Claude: Strong free cash flow generation of $1.9B (9.7% FCF margin) demonstrates operational cash conversion despite thin net margins. EPS growth of 6.3% YoY shows operational leverage and cost discipline despite flat revenue.
What are the risks of investing in KMX?
Claude: Zero revenue growth (0.0% YoY) signals market saturation or operational challenges in a capital-intensive business. Extreme leverage with 2.74x debt-to-equity ratio ($16.6B long-term debt on $6.1B equity) leaves minimal margin for error and limits financial flexibility.
What is KMX's revenue and growth?
CARMAX INC reported revenue of $19.9B.
Does KMX pay dividends?
CARMAX INC does not currently pay dividends.
Where can I find KMX SEC filings?
Official SEC filings for CARMAX INC (CIK: 0001170010) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is KMX's EPS?
CARMAX INC has a diluted EPS of $2.46.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is KMX a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, CARMAX INC has a HOLD rating with 55% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is KMX stock overvalued or undervalued?
Valuation metrics for KMX: ROE of 6.1% (sector avg: 18%), net margin of 1.8% (sector avg: 8%). Compare these metrics with sector averages to assess valuation.
Should I buy KMX stock in 2026?
Our dual AI analysis gives CARMAX INC a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is KMX's free cash flow?
CARMAX INC's operating cash flow is $2.3B, with capital expenditures of $408.0M. FCF margin is 9.7%.
How does KMX compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 1.8% (avg: 8%), ROE 6.1% (avg: 18%), current ratio 1.99 (avg: 1.5).