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Stock

CarMax

KMX
32
Auto - Dealerships · Consumer Cyclical
Also trades as: 0HTQ.L GBP 0.52 (-0.33%)
Price
$52.88
+1.39 (+2.70%)
Market Cap
$7.51B
Winston Score
32
Winston is serious
Below-average fundamentals — multiple weak pillars.
Data as of Oct 22, 2026 · filings through Aug 31, 2026

§How the score breaks down

Quality
Weak
3/30
Growth
Mixed
5/20
Cash Flow
Strong
7/10
Stability
Weak
1/10
Valuation
Good
6/10
Ownership
Good
8/15
Dividends
Not counted
n/a

30 of 95 counted points = Winston Score 32. Pillars marked n/a do not apply to this company and are left out of the total.

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Share count falling — buybacks

−10.6% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 165.2M (2022) → 147.6M (2026)

§Winston Score History

The full picture

CarMax is the largest used-car retailer in the United States. It buys and sells used vehicles directly to everyday consumers, operating hundreds of physical dealerships across the country. The company is known for its no-haggle pricing model, meaning customers pay a set price rather than negotiating with a salesperson.

CarMax makes money primarily by selling used cars at a markup over what it paid for them, and it earns additional revenue from financing loans to customers through CarMax Auto Finance, plus fees from extended warranties and other add-on products. It operates roughly 240 locations across the U.S. and has built a loyalty advantage through its transparent buying experience and large inventory selection. However, the company is currently unprofitable at the operating level, and its biggest risk is its sensitivity to interest rates — when borrowing costs rise, fewer consumers can afford monthly car payments, which directly pressures both sales volume and loan profitability.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+19.5% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+81.2% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

7.6%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$16.0B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

CarMax is a rare growth stock that's already generating positive cash flow while growing at 19%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale
Gross Margin
10.1%
Thin — 10.1% gross margin
Profit after running costs
Operating Margin
3.0%
Thin — 3.0% operating margin
Return on the money invested
ROCE
-0.6%
Weak — -0.6% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales growth
Sales YoY
+4.8%
Slow sales growth (+4.8% YoY)
Profit growth
EPS YoY
-37.5%
Earnings shrinking (-37.5% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is
EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash
Cash Conversion
547%
Turns 547% of profit into real cash
Spare cash per sale
FCF Margin
4.1%
Thin free cash flow (4.1%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

What it owes vs what it owns
Debt / Equity
2.83
Heavy debt load (2.83)
Covers its interest
Interest Cover
N/A
Data not available

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Valuation

Price vs profit
P/E Ratio (TTM)
24.8x
Growth-priced — P/E 24.8

P/E above the market average. People are paying up for expected growth.

Cheaper or dearer next year
P/E vs Forward
+4.6
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (24.8 → 20.2)

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Dividends

Not applicable for this business.
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