Does CarMax (KMX) Have the Potential for Price Improvement?

Group 1 - The FPA Crescent Fund reported a gain of 5.54% in Q3 2025 and 15.32% over the trailing twelve months, with top five performers contributing 6.65% to the return and bottom five detracting 2.58% [1] - CarMax, Inc. (NYSE:KMX) has experienced a one-month return of -7.48% and a 52-week loss of 46.61%, with a market capitalization of $5.993 billion as of November 5, 2025 [2] - The management of CarMax has faced criticism for missteps, including withdrawing 2030 unit sales targets and overbuying inventory, leading to a 47% decline in share price year to date [3] Group 2 - Despite the disappointing management execution, CarMax shares are considered inexpensive, trading at approximately 12x forward consensus earnings and 1.1x tangible book value [3] - Two independent directors purchased shares in early October, indicating potential confidence in the company's future [3] - CarMax has increased its share repurchase program, although there is a preference for delaying repurchases until the market absorbs the current negative news [3]