Here’s What Affected CarMax (KMX) in Q3

Core Insights - FPA Source Capital's net asset value increased by 4.59% in Q3 2025 and 13.76% over the trailing 12 months [1] - The top five equity performers contributed 4.82% to the fund's return, while the bottom five detractors reduced it by 2.03% [1] Company Performance - CarMax, Inc. (NYSE:KMX) experienced a one-month return of 16.75% but has lost 55.48% of its value over the last 52 weeks, closing at $38.82 per share with a market capitalization of $5.826 billion on December 05, 2025 [2] - CarMax's management 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] - Despite management's execution issues, CarMax's 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 current disappointing news [3] - The company is viewed as having a differentiated used vehicle retail business, with potential for substantial share price improvement if operational execution improves [3]