CarMax Shares Down: What's Going On?

CarMax Inc KMX shares are trading lower by around 4%. Needham analyst Chris Pierce reiterated the Hold rating on the stock after spending a day at the company's Richmond Innovation Center.

The analyst notes that the used auto industry is becoming less fragmented as larger players expand shares. 

Pierce is confident in KMX's ability to boost share over the long term on Edmunds acquisition and the benefits of omnichannel and AI/ML investments as consumers shift more of their vehicle purchases online.

However, the analyst's cautious view on near-term share gain is unchanged, with KMX having less leverage to 10+ year-old vehicles. This represents a higher percentage of industry sales, given increased new-vehicle ASPs, higher interest rates pushing customers to lower-priced vehicles, and broader macro uncertainty acting as an overhang.

The analyst estimates revenue and EPS of $27,896.6 million and $3.06 for FY24 and $30,887.8 million and $4.03 for FY25. 

Also Read: CarMax Bears The Brunt Of Uncertain Macro, Competition & Uncertainties In Used-Car Markets: Analysts

Price Action: KMX shares are down 4.59% at $65.40 on the last check Wednesday.