CarMax (KMX) Stock Forecast & Price Target

CarMax is viewed favorably because its used-vehicle comps are improving, with retail comp units up 13% year over year and strong conversion gains supported by pricing changes, customer experience upgrades, and FTC-driven pricing transparency that helps its no-haggle model. It also appears to be translating that momentum into better profitability, as retail GPU held near $2,105 despite investment, and management remains on track for $200 million in exit-rate SG&A savings by the end of FY'27. With 780,684 used vehicles retailed in fiscal 2026, 538,203 wholesaled, and only about 3.6% share of the zero to 10 year old vehicle market in calendar 2025, it still has substantial room to gain share through its omni-channel scale and cash flow.

CarMax is facing a difficult fundamental setup because its retail growth must eventually lap tough FY'27 comparisons tied to pricing initiatives and FTC transparency benefits, while consumer demand for used cars may recover more slowly than expected and pressure average selling prices. The company also sits in a challenging competitive middle, with online rivals like Carvana dominating the e-commerce channel and traditional dealers offering deeper inventory and stronger make/model expertise, limiting CarMax’s differentiation despite its scale. Affordability remains strained as used vehicle prices are still about 40% above pre-pandemic levels and monthly payments about 50% higher, while higher funding rates and normalizing credit metrics are pressuring CarMax Auto Finance, a business that has become more important to earnings.