CarMax Inc. shares reached a 52-week high of $62.57 on Wednesday, closing at $62.54, as the used-car retailer’s turnaround strategy gained traction among investors and analysts.
The stock has rallied 58% year-to-date and 37% over the past six months, extending gains following first-quarter results that exceeded expectations. Earnings per share surpassed estimates by about 30%, while vehicle volumes rose approximately 3%, driven by an 8% increase in the wholesale channel. Fiscal third-quarter growth reached 7.5%, according to Barclays.
Analysts offered mixed assessments of CarMax’s valuation. UBS maintained a Neutral rating but raised its price target to $57, citing expectations for unit growth. Benchmark reiterated a Hold rating, highlighting success under the new CEO and steady vehicle volume expansion. JPMorgan upgraded CarMax from Underweight to Neutral, noting better-than-expected sales trends with year-over-year growth in the high single digits. Barclays also upgraded the stock from Underweight to Equalweight, emphasizing the 7.5% third-quarter growth and confidence in management’s turnaround strategy.
Despite the stock’s momentum, InvestingPro analysis flagged concerns, noting CarMax is trading above its Fair Value while displaying weak gross profit margins of 11.8%. The 52-week low stands at $30.26, underscoring the extent of the rally from prior lows.
The company’s first-quarter performance and subsequent analyst actions reflect growing optimism around its operational improvements, though margin pressures remain a key watchpoint for investors.
