Market Pulse59Neutral

CarMax, Inc.Opportunity Rank #132(KMX) Intrinsic Value & DCF Analysis (2026)

Current Price

$39.91

Last updated: May 08, 2026

Price vs Intrinsic Value

$39.91
Price
$291.53
Intrinsic Value
Undervalued by 630%MOS: $233.22

Fundamental Score

69/100
Bullish

Weighted across 6 signals

Narrative Score

50/100
Weak

No change vs previous

Trend Score

29/100
Weak

As of 2026-05-08

The intrinsic value of CarMax, Inc. (KMX) is estimated at $291.53 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $39.91, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes an 8.70% long-term growth rate and a 10.00% discount rate (calculated: 7.74%), reflecting expected future free cash flow and cost of capital.

The intrinsic value of CarMax, Inc. (KMX) is estimated at $291.53 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $39.91, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes an 8.70% long-term growth rate and a 10.00% discount rate (calculated: 7.74%), reflecting expected future free cash flow and cost of capital.

Valuation Details

$291.53
▲ 630.47% upside
20% margin of safety: $233.22
Years: 10Growth Rate: 8.70%
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Capital Efficiency

Average Quarterly ROIC
0.26%
Cost of Capital (estimated)11%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

69/100
BullishWeighted across 6 signals
DCF Discount
630.5% discount to price
100
FCF Yield
41.1% trailing FCF yield
100
ROIC vs WACC
ROIC 0.3% vs WACC 11.0% (0.0x)
1
Net Debt / FCF
1.1x net debt to FCF
56
Buybacks
Share count shrinking
80
FCF CAGR (5Y)
22.8% 5Y FCF CAGR
100
Strengths: DCF Discount, FCF Yield. Concerns: ROIC vs WACC.

Narrative Details

50/100
Weak
Vs 6-Month Baseline:Below Avg (29th pct)Weighted across 6 recent drivers
Trend: StableConfidence: 87%Updated: 16h ago
Sources: 65 (57 News · 8 Analyst)
Drivers(last 30 days)
Margin pressure+0.1
45 news sentiment-0.0
Promotions/discounting-0.0
5 regulatory scrutiny-0.0
2 legal risk-0.0
3 earnings beat-0.0

Trend Details

29/100
WeakAs of 2026-05-08311 daily bars used
3M Relative Strength vs SPY-21.3%
Distance from 52-Week High-43.6%
6M Relative Strength vs SPY-10.0%
Price vs 21 EMA59 · +1.4%
Price vs 50 EMA42 · -1.6%
21 EMA vs 50 EMA27 · -3.0%
3M RS vs SPY3 · -21.3%
6M RS vs SPY25 · -10.0%
Distance from 52W High13 · -43.6%

Investment Coach

Updating... 1d ago
BUYConfidence: 54%
Thesis
CarMax, Inc. is significantly undervalued with an estimated fair value 635.7% above its current price, supported by strong fundamentals and a healthy free cash flow yield of 41.1%. Despite trailing returns relative to its cost of capital, the company's constructive fundamentals and buyback activity suggest potential for substantial upside.
Key Risk
The key risk is the negative spread between ROIC and WACC, indicating returns are currently below the cost of capital, which could pressure valuation if not improved.
Signals To Watch
  • Monitor whether valuation discount remains above 10%.
  • Track ROIC vs WACC spread for sustained improvement.
  • Follow narrative trend for meaningful shifts in the score direction.
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 8.70%5 Year CAGR: 22.81%

Free Cash Flow (in millions)

TTM2025202420232022202120202019201820172016201520142013201220112010200920082007
$2,325$1,092$924$1,706-$2,241$832$95$468$216-$50$167-$658-$303-$543$110$59$73$450$333$329

How Intrinziq Estimates Fair Value

Intrinziq estimates CarMax, Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

CarMax, Inc.Consumer Cyclical

CarMax, Inc., together with its subsidiaries, operates as a retailer of used vehicles in the United States. The company operates through two segments, CarMax Sales Operations and CarMax Auto Finance. It offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; and extended protection plans to customers at the time of sale, as well as sells vehicles that are approximately 10 years old and has more than 100,000 miles through wholesale auctions. The company also provides reconditioning and vehicle repair services; and financing alternatives for retail customers across a range of credit spectrum through its CarMax Auto Finance and arrangements with various financial institutions. As of February 28, 2022, it operated approximately 230 used car stores. CarMax, Inc. was founded in 1993 and is based in Richmond, Virginia.