Core Viewpoint - CarMax is facing significant challenges as it prepares for its upcoming earnings report, with a stock price decline of over 50% year-to-date and a 75% drop from its all-time high in November 2021, marking one of the deepest slumps among major specialty retailers [1][2]. Group 1: Company Performance - CarMax's market capitalization is currently $5.5 billion, making it the second-smallest stock in the Consumer Discretionary Sector SPDR Fund, which has been one of the worst-performing sectors this year [2]. - The company is operating under an interim CEO and interim executive chairman after the removal of former CEO Bill Nash, with upcoming Q3 results expected to reset expectations for the largest used car retailer in the U.S. [3]. Group 2: Market Conditions - The average price of used cars remains close to $26,000, leading customers to opt for older, higher-mileage vehicles, while interest rates are still high, with an average of 11.2% reported in Q2, impacting affordability and wholesale transactions [5]. - Despite these pressures, CarMax's shares are at historically low valuations, with price-to-earnings at 11.2, price-to-sales at 0.2, and price-to-book at 0.9, the lowest in the past 20 years [6]. Group 3: Leadership Changes - The board's decision to remove the long-tenured CEO highlights the urgency of the situation, with interim leaders tasked with stabilizing the business and adapting to changing consumer preferences [7]. - The board believes that increased involvement from interim leaders will strengthen the business during this transitional period, focusing on driving sales, enhancing profitability, and reducing costs [8]. Group 4: Future Outlook - CarMax is positioned as a deep-value turnaround story amid a challenging affordability cycle and leadership changes, with potential for rebound if pricing normalizes and interest rates decrease [9].

Core Viewpoint - CarMax, Inc. is facing a class action lawsuit due to allegations of misleading investors about its growth prospects for fiscal year 2026, particularly following disappointing financial results that led to a significant drop in stock price [1][2][3]. Summary by Sections Company Overview - CarMax, Inc. is identified as the largest retailer of used vehicles in the United States [1]. Class Action Details - A class action was filed on behalf of investors who acquired CarMax securities between June 20, 2025, and September 24, 2025, alleging that the company misrepresented its growth potential [1][4]. Financial Performance - On September 25, 2025, CarMax reported disappointing financial results for the second quarter of fiscal year 2026, resulting in a stock price decline of $11.5 per share, or 20.07%, closing at $45.60 [2]. - The following day, the stock fell an additional 1.62%, closing at $44.86 [2]. Allegations of Misrepresentation - Plaintiffs claim that CarMax's growth was overstated, attributing earlier growth in fiscal year 2026 to temporary factors such as customer speculation regarding tariffs [3]. Next Steps for Investors - Shareholders interested in serving as lead plaintiffs must submit their papers by January 2, 2026, while those who do not wish to participate can remain as absent class members [4].

Core Insights - Uxin Limited has formed a strategic partnership with local government authorities in Tianjin to jointly invest in the Uxin Tianjin Used Car Superstore, which will feature a large-scale used car reconditioning facility and a retail experience with a capacity of over 3,000 vehicles [1][3][4] - The first phase of the superstore is expected to begin operations in the first half of 2026, enhancing Uxin's presence in northern China [1][3] Company Overview - Uxin is recognized as China's leading used car retailer, focusing on transforming the industry through advanced production, new retail experiences, and digital empowerment [4] - The company operates under an omni-channel strategy, utilizing both online platforms and offline superstores with inventory capacities ranging from 2,000 to 8,000 vehicles [4] Industry Context - Tianjin, with a population of over 13 million and approximately 4 million registered vehicles, is a major hub for international trade and logistics, providing a strong foundation for Uxin's expansion [2] - The city has prioritized the automotive industry as one of its key sectors, fostering a high-quality modern industrial ecosystem that supports Uxin's growth [2][4] Strategic Advantages - The new superstore in Tianjin is positioned to serve as a regional hub for the Beijing–Tianjin–Hebei area, enhancing Uxin's supply chain and service network [3] - Uxin's Chief Strategy Officer highlighted Tianjin's geographic advantages, transportation network, and policy support as critical factors for the project's success and long-term growth [4]

Core Insights - Uxin Limited has formed a strategic partnership with local government authorities in Yinchuan to jointly invest in a new used car superstore, which will display around 3,000 vehicles for sale, marking a significant step in Uxin's nationwide expansion [1][4] Company Overview - Uxin is recognized as China's leading used car retailer, focusing on transforming the industry through advanced production, new retail experiences, and digital empowerment [5] - The company operates under an omni-channel strategy, leveraging both online platforms and offline superstores with inventory capacities ranging from 2,000 to 8,000 vehicles [5] Regional Significance - Yinchuan, the capital of the Ningxia Hui Autonomous Region, is a key hub in China's westward development strategy, with a population of nearly 3 million and over 1.4 million registered vehicles, indicating high per-capita vehicle ownership [2] - The city has been actively fostering the automotive and mobility sectors, providing a solid foundation for Uxin's expansion in the region [3] Strategic Goals - Uxin aims to enhance its supply-chain efficiency and customer service network through the new superstore in Yinchuan, contributing to the long-term growth of the regional automotive industry [3][4]

Core Viewpoint - Carvana is set to release its third-quarter results, with the stock experiencing a 2% increase in anticipation of the report, although it remains down approximately 8% from its all-time high earlier this year [1][2]. Group 1: Stock Performance and Market Sentiment - Carvana has seen a remarkable increase of about 2,390% over the past three years, driven by strong sales and earnings growth, despite ongoing controversies surrounding the stock [4]. - The stock is considered a battleground, with notable investors divided on its future valuation; short seller Jim Chanos has raised concerns, while CNBC's Jim Cramer is optimistic about the upcoming earnings report [2][5]. Group 2: Earnings Expectations - Carvana anticipates a sequential increase in retail units sold for Q3 and expects non-GAAP EBITDA to be between $2 billion and $2.2 billion for the full year [6]. - Analysts project a year-over-year sales increase of approximately 40% to $5 billion, with earnings per share expected to more than double compared to the previous year [6].

Core Insights - Vulcan Value Partners reported positive absolute performance across all strategies in Q3 2025, with the All-Cap Composite leading at 5.5% net return [1] - The investor letter highlighted CarMax, Inc. as a significant detractor to performance, with a one-month return of -25.97% and a 52-week loss of 40.87% [2][3] Company Performance - CarMax, Inc. is the largest used car retailer in the U.S. and has the third largest wholesale business [3] - The company experienced a 5% decline in retail volumes during Q2 2025, attributed to volatility in used car prices and demand shifts due to tariff announcements [3] - Year-to-date, CarMax's volumes and profits are up year over year, indicating potential for recovery [3] Market Outlook - Despite short-term challenges, CarMax is viewed as a strong business with favorable long-term prospects due to its competitive advantages such as customer experience, brand strength, scale, vertical integration, and omnichannel approach [3] - The company is currently under earning but is well-positioned to grow volumes and increase earnings as the market normalizes [3] - CarMax maintains a solid balance sheet, generates significant free cash flow, and is actively buying back shares, indicating confidence in its value [3]

Investment Performance Summary - The Large Cap Composite (Gross) achieved a quarterly return of 4.7% and a year-to-date return of 10.0% [3][10] - The Small Cap Composite (Gross) reported a quarterly return of 4.3% and a year-to-date return of 6.6% [16] - The Focus Composite (Gross) had a quarterly return of 3.8% and a year-to-date return of 7.3% [20] - The All Cap Composite (Gross) recorded a quarterly return of 5.7% and a year-to-date return of 9.9% [29] Company Contributions and Detractors - Medpace Holdings Inc. was a significant contributor to performance, with revenue growing at a mid-teens rate and operating earnings up 20% year-over-year [13][33] - Alphabet Inc. also contributed positively, benefiting from a favorable remedies decision in an antitrust case [14][34] - CarMax Inc. was identified as a material detractor, experiencing a 5% decline in retail volumes due to market volatility [15][19] Strategic Actions - Fiserv Inc. was purchased during the quarter, expected to generate over $5 billion in free cash flow, which will be used for share repurchases [11][31] - CBRE Group Inc. was sold to reallocate capital to more discounted businesses, despite its strong market position [12][32] - No new positions were added in the Small Cap and Focus strategies during the quarter [17][21] Market Conditions and Outlook - Stock price volatility was noted earlier in the year due to tariff-related concerns, leading to capital allocation towards stable value companies [8] - The overall market is perceived as not cheap, but the portfolios maintain a margin of safety with attractive price-to-value ratios [9][10] - The used car market remains volatile, but CarMax is expected to leverage its competitive advantages for long-term growth [15][19]

Group 1 - CarMax Inc reported second-quarter earnings per share of 64 cents, missing the analyst consensus estimate of $1.09 [1] - Quarterly sales were $6.594 billion, down 6% year over year, and also missed the expected $7.024 billion [1] - The company purchased a total of 293,000 vehicles in the second quarter, a 2.4% decrease from the previous year [1] Group 2 - CEO Bill Nash expressed confidence in the long-term strategy and earnings model despite the challenging quarter [2] - Following the earnings announcement, CarMax shares fell 0.4% to $45.41 [2] Group 3 - Needham analyst Chris Pierce maintained a Buy rating but lowered the price target from $92 to $60 [4] - Evercore ISI Group analyst Michael Montani downgraded CarMax from Outperform to In-Line, cutting the price target from $80 to $52 [4] - Baird analyst Craig Kennison maintained an Outperform rating and lowered the price target from $90 to $60 [4] - RBC Capital analyst Steven Shemesh maintained an Outperform rating and reduced the price target from $81 to $59 [4] - Truist Securities analyst Scot Ciccarelli maintained a Hold rating and lowered the price target from $74 to $47 [4]

Core Insights - Uxin Limited, a leading used car retailer in China, is set to open a new used car superstore in Zhengzhou, Henan Province on September 27, 2025, marking its fourth superstore launch in major Chinese cities [1][4]. Group 1: Superstore Details - The Zhengzhou superstore will cover approximately 150,000 square meters and will feature one of China's largest used car showrooms along with an in-house reconditioning facility [2]. - The facility is designed to display and sell up to 5,000 vehicles, showcasing Uxin's ability to replicate and scale its business model effectively [2][4]. Group 2: Market Context - Zhengzhou, the capital of Henan Province, has a resident population exceeding 13 million and over 5 million registered vehicles, ranking among the top ten cities in China for used car transactions [3]. - The city serves as a key transportation hub in central China, providing a strong foundation for the operation of a large-scale used car superstore [3]. Group 3: Strategic Implications - The opening of the Zhengzhou superstore is expected to enhance Uxin's market penetration in central China and provide a wider selection of high-quality vehicles and professional services to regional consumers [4]. - The continued rollout of new superstores is anticipated to be a significant growth driver for Uxin's sales volume and financial performance in the coming years [4]. Group 4: Company Overview - Uxin is committed to transforming the used car industry in China through advanced production, new retail experiences, and digital empowerment, offering high-quality vehicles and superior after-sales services [5]. - The company operates under an omni-channel strategy, leveraging its online platform and offline superstores with inventory capacities ranging from 2,000 to 8,000 vehicles [5].

Market Overview - The U.S. stock market is experiencing a notable pullback, with major indexes extending losses for a third consecutive session, driven by profit-taking and concerns over equity valuations [1][2] - Afternoon trading reflects a cautious mood as market participants digest economic data and corporate news [1] Market Indexes Performance - The Dow Jones Industrial Average (DJIA) was down approximately 0.2%, or 76 points, closing at 46,121.28 [2] - The S&P 500 (SPX) slipped between 0.4% and 0.7%, heading towards its longest slide in over a month, after falling to 6,637.97 [2] - The Nasdaq Composite (IXIC) traded 0.3% to 0.7% lower, following a dip to 22,497.86 [2] Sector Performance - Mixed performance across sectors, with profit-taking evident in the technology segment; seven out of 11 sectors in the S&P 500 ended in negative territory [3] - The Energy Select Sector SPDR (XLE) advanced 1.3%, while the Materials Select Sector SPDR (XLB) and Real Estate Select Sector SPDR (XLRE) saw declines of 1.2% and 1%, respectively [3] Copper Market Impact - A surge in copper prices is noted after Freeport-McMoRan declared force majeure on supplies from its Grasberg mine due to a fatal mudslide, causing copper prices to rise by 1.1% [4] - Shares of copper producers like Anglo-American and Glencore saw gains due to this supply disruption [4] Homebuilders Performance - Homebuilders like Lennar (LEN) and D.R. Horton (DHI) are experiencing gains, attributed to a 20.5% surge in U.S. sales of new homes in August 2025, reaching an annual rate of 800,000 units [5] Upcoming Economic Data - Key U.S. inflation data (PCE) is anticipated, which could significantly influence market direction [6] - Weekly jobless claims data and the latest GDP estimate are also set to be released, providing insights into the labor market and economic health [6] Federal Reserve Commentary - Federal Reserve Chair Jerome Powell's remarks on equity prices being "fairly highly valued" and a measured approach to interest rate cuts continue to weigh on investor sentiment [7] - Stronger-than-expected economic reports may reduce the urgency for aggressive rate reductions [7] Corporate Earnings Reports - Notable companies like Costco Wholesale (COST), Accenture (ACN), and CarMax (KMX) are scheduled to report fiscal fourth-quarter results, which will be closely watched for insights into consumer spending [8][9] Individual Stock Movements - Technology stocks, particularly in the AI space, are facing profit-taking; Nvidia (NVDA) shares fell 0.8% and Oracle (ORCL) fell 1.7% due to valuation concerns [10] - Intel (INTC) shares rose over 5% on news of seeking investment from Apple, while IBM (IBM) rose more than 5% following positive trial results using its quantum computing technology [11] - Starbucks (SBUX) shares slipped almost 1% due to layoffs and store closures, while CarMax (KMX) tumbled 19.8% after reporting weaker-than-expected profits [12] - Lithium Americas (LAC) soared 95.8% on reports of potential U.S. government investment in its lithium project [13] Market Environment - The market is navigating a complex environment characterized by a resilient economy, cautious Federal Reserve, and re-evaluation of high-growth stock valuations [14]