CarMax, Inc. (KMX)
Quantitative Summary
DeterministicKMX trades at 26.6x earnings, roughly in line with its sector average of 35.0x. Strong operational fundamentals (Piotroski 7/9) with Altman Z of 1.7.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of CarMax, Inc. reveal a capital structure where returns on invested capital fall short of the cost of equity, evidenced by an ROIC-WACC spread of -1.4%, suggesting potential value erosion from current deployment strategies. Despite this efficiency gap, earnings per share are supported primarily through financial leverage rather than operational excellence; the DuPont decomposition shows that while net margins remain thin at 1.9% and asset turnover is modest at 0.96x, a high equity multiplier of 4.39x drives an ROE of 8.0%. Quality signals present a mixed picture: the Piotroski F-Score of 7/9 indicates strong financial health relative to peers, yet the Altman Z-Score of 1.7 flags elevated bankruptcy risk, while revenue contracted slightly by 0.7% year-over-year.
Valuation metrics suggest the market is pricing in significantly higher growth expectations than historical performance supports. The current P/E ratio of 15.3x stands well below the sector average of 34.6x, yet this discount coexists with an implied ten-year free cash flow growth rate of 22.5%, creating a potential divergence between conservative valuation multiples and aggressive long-term assumptions. While profitability factors remain neutral, the stark contrast between the low multiple and high implied growth warrants scrutiny regarding whether current pricing adequately compensates for the underlying capital inefficiencies noted in the ROIC analysis.
Risk-adjusted performance data highlights significant underperformance relative to standard factor models. The Fama-French alpha of -75.01% indicates substantial negative excess returns over the measurement period, while insider flow remains neutral with no notable activity detected over the last 90 days. Although the Beneish M-Score of -2.69 suggests low earnings manipulation risk and the HML factor score is neutral, the combination of negative alpha, contraction in top-line revenue, and a Z-score hovering near distress thresholds presents a complex risk-reward profile that investors must weigh against the attractive multiple relative to sector peers.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
Valuation Context
Currently trading 23% below its 5-year average P/E of 19.8x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedCarMax, Inc. currently trades at $40.33 within the consumer cyclical sector, presenting a technical landscape where risk dynamics are heavily influenced by macroeconomic sensitivity rather than isolated momentum shifts. The proximity of current pricing levels to historical support zones suggests that any further downside movement could trigger accelerated volatility, characteristic of defensive stocks facing headwinds in discretionary spending environments. This setup implies that recent price action may be fragile, as the stock lacks a robust structural floor immediately below this level, making it susceptible to sharp corrections if broader market sentiment weakens or consumer confidence erodes. The interplay between drawdown potential and sector-specific cyclicality indicates that momentum at these levels is likely reactive rather than self-sustaining. Without significant volume confirmation or a break above key resistance thresholds, the current trajectory appears vulnerable to external shocks typical of retail environments during economic uncertainty. Technical indicators point toward a scenario where downside risk may exceed upside opportunity in the near term, as the asset struggles to decouple from broader cyclical pressures that constrain valuation expansion. Ultimately, the technical profile reflects an equilibrium state fraught with potential instability rather than confirmed directional strength. The absence of clear bullish divergence or sustained upward pressure suggests that maintaining current positions requires vigilance against rapid devaluation if fundamental data fails to support continued consumer demand. Investors must weigh the possibility of a prolonged consolidation phase where volatility remains elevated, as the stock has not yet demonstrated the resilience needed to weather potential sector-wide downturns effectively without external catalysts driving price
Quant Health Deep Dive
Profitability & Value Creation
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XRT or SLYV, the fund manager is mechanically forced to buy or sell KMX shares regardless of CarMax, Inc.'s individual fundamentals. We estimate $337M of passive capital is structurally linked to KMX through 8 tracked ETFs. Passive flows have a limited but growing influence on KMX's daily trading dynamics.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in CarMax, Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If CarMax, Inc. (KMX) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Amazon.com Inc. (AMZN) as the most exposed collateral stock, sharing 1 ETFs with KMX. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 10 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
KMX Ownership Dynamics
Passive funds hold 1 in every 15 KMX shares, reducing daily market volatility.
CarMax, Inc. (KMX) exerts measurable gravity on the passive index market, currently representing 1.3% of the XRT (XRT) and 0.7% of the SLYV (SLYV). Across 10 tracked ETFs, approximately 9M shares (6.6% of float) are held by passive funds and rarely trade on the open market. As passive ownership grows, index inclusion changes may increasingly drive price discovery.
ETFs with Highest KMX Exposure
Float lock-up computed from 10 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
KMX Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for CarMax, Inc. over the past year sits near $41.73 (18% of 252-day volume). The current price of $43.93 trades 5.3% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (18% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
KMX Capital Efficiency
How efficiently does CarMax, Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
CarMax, Inc. converts 9% of its EBITDA into free cash flow, a low conversion rate suggesting heavy reinvestment. This may indicate a growth phase (building capacity) or structural capital intensity. The 91% reinvestment rate signals aggressive capacity expansion. However, the ROIC-WACC spread is negative (-1.5%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-04-29 | 2,429 | $38.64 | $93,856.56 |
| 2026-04-28 | 2,408 | $38.17 | $91,913.36 |
| 2026-04-14 | 71,980 | $49.08 | $3.5M |
| 2026-04-13 | 3,400 | $46.72 | $158,848 |
| 2026-03-23 | 15 | $41.86 | $627.9 |
| 2026-03-06 | 237 | $42.05 | $9,965.85 |
| 2026-03-05 | 4,736 | $42.12 | $199,480.32 |
| 2026-02-27 | 34 | $42.86 | $1,457.24 |
| 2026-02-19 | 172 | $45.65 | $7,851.8 |
| 2026-02-11 | 1,383 | $45.83 | $63,382.89 |
| 2026-01-29 | 183 | $46.96 | $8,593.68 |
| 2026-01-21 | 54,601 | $47.45 | $2.6M |
| 2026-01-20 | 15,652 | $48.83 | $764,287.16 |
| 2025-12-29 | 155 | $39.27 | $6,086.85 |
| 2025-12-22 | 21,915 | $38.47 | $843,070.05 |
| 2025-12-19 | 2 | $39.34 | $78.68 |
| 2025-12-15 | 65,330 | $41.01 | $2.7M |
| 2025-12-05 | 25,201 | $38.90 | $980,318.9 |
| 2025-11-13 | 75,379 | $34.42 | $2.6M |
| 2025-11-12 | 99,646 | $34.14 | $3.4M |
| 2025-11-07 | 1,463,117 | $30.88 | $45.2M |
| 2025-11-06 | 717 | $40.81 | $29,260.77 |
| 2025-10-31 | 17,253 | $41.87 | $722,383.11 |
| 2025-10-27 | 99,540 | $44.26 | $4.4M |
| 2025-10-22 | 9,621 | $44.70 | $430,058.7 |
| 2025-10-15 | 392,696 | $44.00 | $17.3M |
| 2025-10-14 | 3,376 | $43.69 | $147,497.44 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| RXO | 0.521 | 0.587 | Moderate |
| PCAR | 0.480 | 0.435 | Moderate |
| XRAY | 0.476 | 0.509 | Moderate |
| SWK | 0.467 | 0.406 | Moderate |
| OC | 0.461 | 0.454 | Moderate |
| CFG | 0.456 | 0.400 | Moderate |
| MGM | 0.452 | 0.439 | Moderate |
| TFX | 0.450 | 0.464 | Moderate |
| AUB | 0.449 | 0.386 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare KMX to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.