CarMax (KMX) Stock Forecast & Price Target

CarMax is the largest used-vehicle retailer in the US and its recent retail and wholesale units sold have been positive. With a new CEO in place, the company has implemented a growth strategy and seen improvements in areas such as lead generation advertising, select pricing actions, and lease returns, indicating potential for future earnings growth. Despite this, many investors are still not optimistic about the company's potential and there is a lack of positive sentiment from the sell-side community, providing a favorable opportunity for the stock to see a potential increase in value.

CarMax is the largest used-vehicle retailer in the US with a market share of only about 3.6% for vehicles zero to 10 years old, making it a small player in a highly fragmented market. Their financial performance in fiscal 2026 was boosted by a one-time $25 million benefit to loss provisions, which masks the underlying weakness in their core business. Additionally, the company's efforts to improve price competitiveness and digital capabilities will likely continue to put pressure on their already slim margins, making it difficult for them to achieve significant growth in market share.