CarMax Stock Outlook: Is Wall Street Bullish or Bearish?

Core Insights - CarMax, Inc. is one of the largest retailers of used vehicles in the U.S. with a market cap of $4.5 billion, operating through Sales Operations and Auto Finance segments [1] Performance Overview - CarMax has significantly underperformed the broader market, with stock prices declining 58.2% year-to-date and 55.5% over the past 52 weeks, while the S&P 500 Index returned 16.4% in 2025 and 14.1% over the past year [2] - The company also lagged behind the Consumer Discretionary Select Sector SPDR Fund, which saw a 6.8% increase in 2025 and 9.2% gains over the past 52 weeks [3] Q2 Results - Following the release of Q2 results on September 25, CarMax's stock prices experienced a marginal dip, with retail used unit sales dropping 5.4%, comparable store used unit sales declining 6.3%, and wholesale units dipping 2.2% [4] - The average selling prices also saw a slight decrease, leading to a topline of $6.6 billion, down 6% year-over-year and 6.5% below Street expectations [4] - Earnings per share (EPS) plunged 24.7% year-over-year to $0.64, missing consensus estimates by 37.9% [4] Future Expectations - For the full fiscal 2026, analysts expect CarMax to deliver an adjusted EPS of $3.15, reflecting a 3.7% year-over-year decline [5] - The company has a mixed earnings surprise history, missing bottom-line estimates once in the past four quarters while meeting or surpassing projections on three occasions [5] Analyst Ratings - Among 19 analysts covering CarMax, the consensus rating is a "Hold," consisting of two "Strong Buys," 13 "Holds," one "Moderate Sell," and three "Strong Sells" [5] - The current consensus is notably pessimistic compared to two months ago when the stock had a "Moderate Buy" rating [6] - Morgan Stanley analyst downgraded CarMax from "Overweight" to "Equal-weight" and lowered the price target from $56 to $35 [6]