Core Viewpoint - CarMax, Inc. experienced a significant stock decline of nearly 20% following the unexpected increase in loan loss provisions in its CarMax Auto Finance segment, raising concerns about the quality of its loan portfolio [1][6][7]. Financial Performance - The second-quarter 2026 financial results revealed a loan loss provision of $142 million, marking a sequential increase of nearly 40% and a year-over-year rise of approximately 24% [6]. - CarMax's financial results missed analysts' consensus estimates for GAAP EPS and revenue, primarily due to the increased loan loss provision [6]. Management Assurances - Prior to the Q2 2026 report, management had stated during the first-quarter 2025 earnings call that the provision of $101.7 million would likely be the "high watermark" for the year, expressing confidence in the reserve adjustments made [5]. - The recent provisioning increase contradicted these earlier assurances, as management acknowledged deteriorating credit trends that had begun to emerge in Q1 [7]. Investigation and Legal Actions - Hagens Berman, a national shareholders rights firm, has initiated an investigation into whether CarMax misled investors regarding the quality of its loan portfolio [2][3]. - The investigation is focused on the propriety of CarMax's disclosures about the quality of its loan portfolio, which includes older vintage loans and new originations [3][8].

RADNOR, Pa.--(BUSINESS WIRE)-- #classaction--The law firm of Kessler Topaz Meltzer & Check, LLP (www.ktmc.com) is currently investigating potential violations of the federal securities laws on behalf of investors of CarMax, Inc. (NYSE: KMX) ("CarMax†). On September 25, 2025, CarMax released its second quarter fiscal year 2026 financial results, disclosing significant revenue and profit declines year over year, including a revenue decline of 6.0%, total retail used vehicle revenues decline of 7.2%, and a t ...

RBC Capital将CarMax的目标价从81美元下调至59美元，仍维持"跑赢大市"评级。(格隆汇) ...

Core Viewpoint - CarMax, Inc. is under investigation for potential violations of federal securities laws following disappointing earnings reports and claims of misleading statements regarding demand for its vehicles [1][2]. Group 1: Investigation Details - Bleichmar Fonti & Auld LLP is leading the investigation into CarMax for possible securities law violations [1]. - The investigation is prompted by CarMax's claims of strong demand for used cars, which may have been artificially inflated due to pre-tariff purchasing behavior [2]. Group 2: Financial Performance - In fiscal Q2 2025, CarMax reported a 5.4% decline in retail used unit sales, a 6.3% decline in comparable store used unit sales, and a 2.2% decline in wholesale units [3]. - The company's net earnings for Q2 were approximately $95.4 million, down from $132.8 million in the previous year, attributed to a "pull forward" in demand due to tariff announcements [3]. - Following the earnings report, CarMax's stock price dropped by $11.45 per share, or about 20%, from $57.05 on September 24, 2025, to $45.60 on September 25, 2025 [3].

Core Viewpoint - The recent sell-off in CarMax's stock has reset market expectations, but the long-term business fundamentals remain intact despite short-term challenges [1][3]. Financial Performance - For the quarter ended August 31 (fiscal Q2), CarMax reported total sales of $6.59 billion, a decrease of 6% year-over-year, with retail used unit sales down 5.4% and comparable store used units declining 6.3% [5]. - Earnings per share for the quarter was $0.64, down from $0.85 a year ago, while SG&A expenses decreased modestly to $601 million [6]. - Retail gross profit per used vehicle was $2,216, and wholesale gross profit per unit was $993, remaining consistent with the previous year's second quarter [6]. Market Reaction - The stock fell over 20% following weaker-than-expected results and concerns about consumer demand and credit trends within CarMax Auto Finance [2][11]. - The market's reaction reflects a combination of softened demand, increased credit costs, and earnings that missed analysts' forecasts [11]. Long-term Outlook - Despite the current challenges, key elements of CarMax's long-term model remain intact, including steady unit margins, strong digital capabilities supporting the omnichannel approach, and planned SG&A reductions [12]. - Management expressed confidence in the long-term strategy, targeting at least $150 million in incremental SG&A reductions over the next 18 months [7][8]. Financing and Loan Losses - CarMax Auto Finance income declined 11% to $103 million, with provisions for loan losses rising to $142 million from $113 million a year ago [9]. - The allowance for loan losses increased to just over 3% of auto loans held for investment, up from 2.8% as of May 31 [9]. Stock Valuation - Following the sell-off to new 52-week lows in the mid-$40s, the stock's valuation appears attractive for investors willing to wait for a recovery in volumes and normalization of credit [13][14]. - The market has priced in significant negative news, but CarMax remains a leading player with stable per-unit profitability and a proven omnichannel model [14].

Core Viewpoint - CarMax, Inc. is under investigation by Bleichmar Fonti & Auld LLP for potential violations of federal securities laws related to its claims about strong and sustainable demand for used cars [1] Company Summary - CarMax, Inc. operates in the used car sales industry [1] - The company has been promoting the strength and sustainability of demand for its vehicles during the relevant period [1]

Company Overview - Carmax is the largest used-car retailer in the U.S. and also conducts wholesale vehicle auctions, making it one of the largest in the country [7] - The company reported its Q2 2026 results, with shares declining by 20% following the announcement [7] Financial Performance - Carmax missed both top and bottom-line analyst estimates for the quarter, with revenues of $6.6 billion, which is 6% lower than the previous year and $410 million below Wall Street consensus [8] - The earnings per share were 99 cents, falling short by six cents of analyst expectations [8] - The company experienced a decline in sales each month during the quarter, indicating a weakening trend [9] Market Context - Despite the S&P 500's increase of nearly 13% in 2025, most used-car buyers are financially constrained [10] - U.S. household wealth reached $176.3 trillion at the end of June, but the growth in wealth is likely concentrated among the top 10% of Americans, who may not be the primary customers for used cars [11] Stock Performance - Following the recent decline, Carmax's market value has decreased by 44% in 2025, now standing at $6.84 billion, a level not seen since 2016 [12] - Technical analysis suggests a potential for further decline, with a strong sell rating indicating a 100% certainty of continued price decrease [13] Analyst Ratings - Among 19 analysts covering Carmax, 11 rate it a Buy with a target price of $77.94, which is 71% higher than its current share price [13] - Analysts are generally slow to revise target prices downward, which may not reflect the current market conditions accurately [13] Economic Indicators - The U.S. GDP rose by 3.8% on an annualized basis in the second quarter, but this growth was partly due to a decline in imports from tariffs [14] - Household debt reached $185 billion in the second quarter, with a delinquency rate of 4.4%, indicating potential financial strain on consumers [15] Options Strategy - A long strangle strategy involving a $47.50 call and a $40 put was set up, requiring Carmax's share price to exceed $49.55 or drop below $37.95 to be profitable [16] - The expected price movement is 7.38% in either direction, with a profit probability of only 27.3% [17]

Group 1 - CarMax Inc reported second-quarter earnings per share of 64 cents, missing the analyst consensus estimate of $1.09 [1] - Quarterly sales were $6.594 billion, down 6% year over year, and also missed the expected $7.024 billion [1] - The company purchased a total of 293,000 vehicles in the second quarter, a 2.4% decrease from the previous year [1] Group 2 - CEO Bill Nash expressed confidence in the long-term strategy and earnings model despite the challenging quarter [2] - Following the earnings announcement, CarMax shares fell 0.4% to $45.41 [2] Group 3 - Needham analyst Chris Pierce maintained a Buy rating but lowered the price target from $92 to $60 [4] - Evercore ISI Group analyst Michael Montani downgraded CarMax from Outperform to In-Line, cutting the price target from $80 to $52 [4] - Baird analyst Craig Kennison maintained an Outperform rating and lowered the price target from $90 to $60 [4] - RBC Capital analyst Steven Shemesh maintained an Outperform rating and reduced the price target from $81 to $59 [4] - Truist Securities analyst Scot Ciccarelli maintained a Hold rating and lowered the price target from $74 to $47 [4]

Financial Performance - CarMax Inc reported second-quarter earnings per share of 64 cents, missing the analyst consensus estimate of $1.09 [1] - Quarterly sales were $6.594 billion, down 6% year over year, and also missed the expected $7.024 billion [1] - The company purchased a total of 293,000 vehicles in the second quarter, a 2.4% decrease from the previous year [1] Vehicle Acquisition - Of the total vehicles purchased, 262,000 were from consumers, reflecting a 2.7% decrease, while 31,000 were from dealers, which is a slight increase of 0.2% [1] Analyst Reactions - Following the earnings announcement, CarMax shares fell 0.4% to $45.41 [2] - Needham analyst Chris Pierce maintained a Buy rating but lowered the price target from $92 to $60 [4] - Evercore ISI Group analyst Michael Montani downgraded CarMax from Outperform to In-Line and cut the price target from $80 to $52 [4] - Baird analyst Craig Kennison maintained an Outperform rating and lowered the price target from $90 to $60 [4] - RBC Capital analyst Steven Shemesh maintained an Outperform rating and reduced the price target from $81 to $59 [4] - Truist Securities analyst Scot Ciccarelli maintained a Hold rating and lowered the price target from $74 to $47 [4]

LOS ANGELES--(BUSINESS WIRE)--Glancy Prongay & Murray LLP, a leading national shareholder rights law firm, continues its investigation on behalf of CarMax, Inc. (CarMax or the Company) (NYSE: KMX) investors concerning the Company's possible violations of the federal securities laws. IF YOU ARE AN INVESTOR WHO LOST MONEY ON CARMAX, INC. (KMX), CLICK HERE TO INQUIRE ABOUT POTENTIALLY PURSUING CLAIMS TO RECOVER YOUR LOSS. What Happened? On April 10, 2025, CarMax released its fourth quarter and. ...