CarMax, Inc. (NYSE:KMX) is a leading retailer of used vehicles in the United States. The company operates through two segments: CarMax Sales Operations and CarMax Auto Finance (CAF). CarMax is known for its no-haggle pricing and comprehensive vehicle inspection process. It competes with other used car retailers like AutoNation and Carvana.
Faruqi & Faruqi, LLP is investigating CarMax for allegedly misleading investors about its growth prospects. The investigation claims that CarMax's growth in fiscal 2026 was temporarily boosted by customer speculation on tariffs, which was not sustainable. This led to allegedly misleading statements about the company's business and operations.
CarMax's financial results for the second quarter of fiscal 2026 revealed a significant 11.2% decrease in income from CAF. This was due to a $142.2 million provision for loan losses, up from $112.6 million the previous year. The increase included $71.3 million in estimated lifetime losses on existing loans and $70.9 million for current quarter originations.
Following the financial disclosure, CarMax's stock price dropped by about 20%, closing at $45.60 on September 26, 2025. Investors who suffered losses between June 20, 2025, and September 24, 2025, are encouraged to contact Faruqi & Faruqi for legal options. The deadline for lead plaintiff applications in the class action is January 2, 2026.
On November 6, 2025, Evercore ISI maintained a "Reduce" rating for CarMax, with the stock priced at $30.88. Benchmark also downgraded CarMax to a "Hold" rating, reflecting a bearish outlook. The stock price was $35.83 at the time. Currently, KMX is trading at $34.20, with a market cap of $5.21 billion and a trading volume of 2,735,900 shares.
