What Happened?

Shares of used automotive vehicle retailer Carmax (NYSE:KMX) fell 19.8% in the morning session after the company reported underwhelming Q1 2025 (fiscal Q4 2025) results. Its EBITDA missed significantly and its EPS fell short of Wall Street's estimates. More troubling, the company suspended its long-term growth guidance, citing macroeconomic uncertainty, a move that signaled management's reduced visibility and confidence in the future growth trajectory. Overall, this quarter could have been better.

The shares closed the day at $66.45, down 17.1% from previous close.

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What The Market Is Telling Us

CarMax’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for CarMax and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 12 months ago when the stock dropped 12.7% on the news that the company reported first quarter results with revenue and gross margin missing analysts' expectations, leading to an EPS miss. Furthermore, CarMax's management team pushed its goal of 2 million vehicles sold annually to 2026-2030, citing uncertainty in the recovery timing of the used car market. Overall, this was a mediocre quarter for CarMax.

CarMax is down 17.6% since the beginning of the year, and at $66.90 per share, it is trading 25% below its 52-week high of $89.19 from February 2025. Investors who bought $1,000 worth of CarMax’s shares 5 years ago would now be looking at an investment worth $1,069.

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