CarMax (KMX) Stock Forecast & Price Target

CarMax is viewed favorably because its dominant scale in a highly fragmented used-car market, with only about 3.6% market share of vehicles zero to 10 years old in calendar 2025, leaves ample room for long-term share gains as its omni-channel model and proprietary pricing and inventory systems improve conversion. Recent operating evidence reinforces that thesis, with retail comp units up 13% and total unit sales of 227.4k in the quarter, while retail GPU fell only about 5% to $2,105 and SG&A leveraged meaningfully. The resumption of share repurchases, continued cost savings toward $200M, and a regulatory tailwind from FTC enforcement further support earnings growth and cash flow durability.

CarMax is facing a fragile setup because its retail growth is running ahead of the industry, making FY'27 and FY'28 comparisons difficult to lap as pricing actions and FTC transparency benefits fade. The company still has only about 3.6% U.S. share of vehicles zero to 10 years old in calendar 2025, while used-vehicle affordability remains stretched with prices roughly 40% above pre-pandemic levels and monthly payments about 50% higher amid elevated rates. At the same time, guidance calls for FY 2027 gross profit per unit to decline less than $200 year over year and CAF income to be slightly lower than FY26, underscoring margin pressure, cyclicality, and sensitivity to consumer demand, lending standards, and competition.