CarMax (KMX) Earnings Expected to Grow: Should You Buy?

Ahead of its earnings release on June 20, CarMax (KMX) is expected to report a 25.8% year-over-year increase in earnings to $1.22 per share on revenues of $7.56 billion, a 6.3% increase from the prior year. The consensus EPS estimate has been revised upward by 0.94% in the last 30 days, and the company currently has a Zacks Rank #3 with an Earnings ESP of +0.41%, suggesting a high probability of exceeding expectations; however, the stock's movement will ultimately depend on the earnings call and broader market factors.

Analysis

CarMax (KMX) is approaching its earnings release for the quarter ended May 2025, with consensus estimates pointing to substantial growth: expected earnings of $1.22 per share represent a 25.8% year-over-year increase, while projected revenues of $7.56 billion signify a 6.3% rise from the year-ago quarter. Reinforcing this positive outlook, the consensus EPS estimate has been revised upwards by 0.94% over the last 30 days. Key proprietary indicators from Zacks suggest a favorable outcome, as CarMax possesses an Earnings ESP (Expected Surprise Prediction) of +0.41% and a Zacks Rank #3 (Hold). This combination historically suggests a high likelihood, approaching 70%, of an earnings beat, driven by the Most Accurate Estimate surpassing the consensus, indicating recent analyst optimism. However, CarMax's track record for earnings surprises is somewhat modest, having beaten consensus EPS estimates only once in the last four quarters, with the most recent quarter delivering in-line results. The market reaction post-June 20 will therefore hinge not just on the headline figures but critically on management's articulation of business conditions and forward guidance during the earnings call, as other factors can often influence investor sentiment despite an earnings beat.

Key Decisions for Investors

• Investors should acknowledge the strong statistical likelihood of CarMax delivering an earnings beat, based on its positive Earnings ESP of +0.41% and Zacks Rank #3, when evaluating positions ahead of the June 20th announcement.
• It is crucial to look beyond the top-line earnings and revenue figures; pay close attention to management's discussion on the earnings call regarding current business conditions, future outlook, and specific trends in the used vehicle market, as these qualitative factors will heavily influence sustained stock performance.
• Considering CarMax's mixed history of earnings surprises (one beat in the last four quarters), investors should prepare for potential market volatility and understand that an earnings beat alone may not guarantee a positive stock price movement if other guiding factors or broader market sentiment disappoint.