Company Overview

CarMax Inc, through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. The company was founded in 1993 and is based in Richmond, Virginia. It was formed in 1993 as a unit of Circuit City and spun off into an independent company in late 2002.

CarMax is the largest used-vehicle retailer in the US. It estimates that it had only about 3.7% US market share of vehicles 0-10 years old in calendar 2024. The company sold 789,000 vehicles in fiscal 2025, making it the largest used car retailer in the U.S.

Business Segments

The company operates in two primary segments: CarMax Sales Operations and CarMax Auto Finance.

CarMax Sales Operations

This segment offers customers a wide range of used vehicles, including domestic, imported, and luxury models, as well as hybrid and electric vehicles. It also includes used vehicle auctions, extended protection plans, and reconditioning and vehicle repair services.

CarMax Auto Finance (CAF)

The CarMax Auto Finance segment provides financing alternatives for retail customers across a broad credit spectrum and arrangements with various financial institutions.

Financial Performance

Market Capitalization

The stock has a market capitalization of $8.64 billion as of September 24, 2025.

Revenue Performance

As of September 2025, CarMax's Trailing Twelve Months (TTM) revenue is $26.78 Billion USD.

Q1 2026 Highlights (ended May 31, 2025)

Key financial metrics from the most recent quarter include:

• Net earnings per diluted share increased 42.3% to $1.38 from $0.97 a year ago.

• Total sales increased by 6% to $7.5 billion, driven by higher unit volume despite lower prices.

• Total gross profit increased by 12.8% to $893.6 million, due to higher unit volumes and strong unit margin performance.

• Record high gross profit per retail used unit of $2,407, up $60 per unit.

• Retail used unit sales increased by 9.0%, and comparable store used unit sales increased by 8.1%.

Fiscal Year 2025 Performance

In fiscal 2025, the company retailed and wholesaled 789,050 and 544,312 used vehicles, respectively. Used-vehicle sales constituted 83% of fiscal 2025 revenue, wholesale about 17%, with the remaining portion from extended service plans and repairs.

Market Position and Growth Strategy

CarMax aims to reach a market share target of over 5% for zero to 10-year-old vehicles, up from 3.7% in calendar 2023 and 2024. The company anticipates achieving revenue of at least $33 billion before reaching its goal of selling a combined 2 million annual retail and auction units.

CarMax's revenue has grown at a compound annual rate of 10.8% since fiscal 2000, attributed to its customer-friendly sales practices and effective use of information technology.

Operational Excellence

The company has built a strong foundation through its omnichannel approach, which offers consumers maximum flexibility in their experience. Retail gross profit per used unit reached an all-time high, supported by strong demand and operational efficiencies in logistics and reconditioning.

As of September 22, 2025, the company has 30,050 employees. CarMax does not currently pay dividends to its shareholders.

Stock Performance and Valuation

CarMax has a 1-year low of $54.53 and a 1-year high of $91.25. The stock has a PE ratio of 15.91, a P/E/G ratio of 0.94, and a beta of 1.35.

The company has doubled its share repurchase pace, buying back approximately 3 million shares for $200 million, with $1.74 billion of repurchase authorization remaining.

Industry Challenges and Opportunities

CarMax operates in a cyclical industry, and its strong model is not immune to economic downturns. While tariffs are not a direct threat, they are likely to increase used vehicle prices and potentially reduce consumer purchasing power.

Conversely, tariffs on new cars are driving up their prices, which in turn boosts demand and prices for used vehicles, thereby benefiting CarMax's core business.

CarMax continues to strengthen its position as America's leading used vehicle retailer through strategic investments in technology, operational efficiency, and customer experience, while maintaining strong financial performance and significant market share growth potential.