CarMax(US:KMX) Globenewswire·2025-12-10 23:34Core Viewpoint - The article discusses a securities class action lawsuit against CarMax, Inc. (NYSE: KMX), highlighting the approaching Lead Plaintiff Deadline of January 2, 2026, and urging affected investors to contact the law firm Hagens Berman for potential participation in the case [1][5]. Summary by Sections Lawsuit Allegations - The lawsuit claims that CarMax and its executives misled investors regarding the stability and growth prospects of the business, resulting in significant stock declines of 44% following a disappointing earnings report and the unexpected termination of the CEO [2][4]. Class Period - The class period for the lawsuit is defined as June 20, 2025, to November 5, 2025, during which investors purchased CarMax securities [3]. Key Issues Highlighted - The complaint identifies two main undisclosed issues that allegedly inflated the stock price: - Unsustainable Demand: CarMax reportedly misrepresented Q1 2026 growth as being robust while failing to disclose that it was driven by a temporary surge in customer demand due to anticipated tariffs [4]. - CarMax Auto Finance Risk: Management assured investors about the stability of their loan reserves, which later revealed a significant increase in loan loss provisions amounting to $142 million, indicating high default risks [4]. Impact on Business - The lawsuit outlines the adverse impacts on CarMax's business, including: - A 24% decline in net EPS and a 40% sequential increase in loan loss provisions announced on September 25, 2025, leading to a 20% drop in stock price [4]. - The CEO's termination and a drastic cut in forward guidance, signaling systemic weaknesses in business operations [4]. Call to Action - Hagens Berman emphasizes the importance of the January 2nd deadline for investors seeking a leadership role in the lawsuit, encouraging those who suffered losses to reach out for assistance [5].