Core Viewpoint - Morgan Stanley has reduced its price target on CarMax shares but still sees potential for upside despite the competitive pressure from Carvana [1] Company Summary - CarMax's shares have been downgraded by Morgan Stanley, indicating a cautious outlook on the company's stock performance [1] - Despite the price target cut, Morgan Stanley believes that CarMax has opportunities for growth in the market [1] Industry Summary - The used car market is experiencing increased competition, particularly from Carvana, which poses challenges for CarMax [1] - The competitive landscape is evolving, and companies in the used car sector must adapt to maintain market share [1]

Core Insights - CarMax is focusing on cost savings and technology initiatives following a challenging quarter, with total sales declining by 6% and unit sales dropping by 5.4% year-over-year [3][4] - The company aims to drive sales, gain market share, and achieve significant year-over-year earnings growth despite current market pressures [4] Technology and AI Integration - CarMax is leveraging AI technologies across various use cases, including customer support and predictive maintenance, after strengthening its IT and data foundation [5][6] - The company has deployed Microsoft's 365 Copilot and other AI coding applications to enhance employee efficiency [6] Financial Projections and Cost Savings - CarMax anticipates that its AI and technology investments will yield at least $150 million in cost savings over the next 18 months [7] - Current AI projects are aimed at enhancing customer experience and improving operational efficiency, with specific initiatives like the AI-powered virtual assistant Skye [7] - Investments in technology are expected to help retire legacy systems and reduce licensing costs, with some savings being redirected to sales-related investments [7]

Core Viewpoint - DJS Law Group is investigating CarMax, Inc. for potential violations of securities laws following disappointing financial results in Q2 2025, which led to a significant drop in the company's stock price [2]. Group 1: Financial Performance - CarMax reported a 6.3% decline in comparable store used unit sales for Q2 2025 [2]. - The company experienced a decline in net earnings for the quarter [2]. - Following the release of these disappointing results, CarMax shares fell approximately 20% [2]. Group 2: Legal Investigation - The investigation by DJS Law Group focuses on whether CarMax issued misleading statements or failed to disclose important information to investors [2]. - Shareholders who suffered losses are encouraged to contact DJS Law Group to participate in the investigation [2]. Group 3: DJS Law Group's Focus - DJS Law Group specializes in securities class actions, corporate governance litigation, and M&A appraisals, aiming to enhance investor returns through advocacy [3]. - The firm represents some of the largest hedge funds and alternative asset managers, emphasizing the value of litigation claims as significant assets [3].

Core Viewpoint - CarMax, Inc. is under investigation for potential violations of federal securities laws, following a significant decline in sales and earnings attributed to a temporary demand spike due to U.S. tariffs on cars [1][2][3]. 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 discrepancies between CarMax's claims of strong demand and the reality of declining sales following the announcement of tariffs [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, indicating a significant drop in profitability [3]. - Following the earnings report, CarMax's stock price fell by $11.45 per share, or about 20%, from $57.05 to $45.60 [3].

Core Insights - CarMax (KMX) shares have dropped by 23% in the past five trading days, reaching approximately $44 per share, and are down over 40% year-to-date, indicating potential undervaluation [3][4] - The company has a robust business model with an extensive national store network and an expanding digital presence, providing network effects that smaller rivals cannot replicate [4] - The recent decline in stock price is attributed to unexpectedly weak Q2 FY'26 results, with revenues decreasing by 6% year-over-year to $6.59 billion and earnings per share falling to $0.64 from $0.85 [5] - The fundamental outlook for CarMax appears bleak, with revenues decreasing at an average rate of -7.4% over the last three years, contrasting with the S&P 500's growth of 5.3% [6] - Financial stability is a concern, as CarMax carries $19 billion in debt against a market cap of $6.7 billion, resulting in a high debt-to-equity ratio of 286% [6] - Potential positive developments include anticipated interest rate cuts that could positively impact the used car market and aggressive cost management strategies that may bolster profitability [7]

Core Insights - CarMax, Inc. is under investigation for potential violations of federal securities laws, following a significant decline in stock price after disappointing earnings reports [1][3]. Group 1: Investigation Details - The investigation is led by Bleichmar Fonti & Auld LLP, a prominent securities law firm [1]. - The inquiry focuses on CarMax's claims regarding 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]. Group 3: Stock Market Reaction - Following the earnings report, CarMax's stock price dropped by $11.45 per share, or roughly 20%, from $57.05 on September 24, 2025, to $45.60 on September 25, 2025 [3].

Bragar Eagel & Squire, P.C. Litigation Partner Brandon Walker Encourages Investors Who Suffered Losses In CarMax (KMX) To Contact Him Directly To Discuss Their Options If you purchased or acquired stock in CarMax and would like to discuss your legal rights, call Bragar Eagel & Squire partner Brandon Walker or Marion Passmore directly at (212) 355-4648. Click here to participate in the action. NEW YORK, Sept. 29, 2025 (GLOBE NEWSWIRE) -- What’s Happening: Bragar Eagel & Squire, P.C., a nationally recognized ...

LOS ANGELES--(BUSINESS WIRE)--CarMax, Inc. Investigated for Securities Fraud Violations – Contact the DJS Law Group to Discuss Your Rights – KMX. ...

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 ...