CarMax Quick F1Q27 Preview: Raise Ests on Slightly Better F1Q SS Units; Sustained Share Recovery and GPU Reset Still TBD; Analyst Day Peek Could Suggest Aggressive Finco Ramp; Remain UW

Research evidence excerpt

CarMax Quick F1Q27 Preview: Raise Ests on Slightly Better F1Q SS Units; Sustained Share Recovery and GPU Reset Still TBD; Analyst Day Peek Could Suggest Aggressive Finco Ramp; Remain UW

and as such our FY27/FY28

EPS estimates move to $2.45/$2.95 vs. $2.25/$2.80 prior and our Dec 2026 PT is Quarterly Forecasts (FYE Feb)

now $37 vs $35 prior. Upside risks to our F1Q estimates are likely to stem from: Adj. EPS ($)

1) better wholesale GPU given strong March wholesale pricing trends; 2) slightly 2026A 2027E 2028E

Q1 1.38 1.05 1.06

lower SG&A from timing of advertising and flow-through of cost actions; Q2 0.64 0.64 0.65

Downside risk is likely to stem from: slightly lower CAF income given recent Q3 0.43 0.55 0.73

compression in Prime ABS excess spreads (Table 3CVNAandKMXNetInterestMargins/ExcesSpreads,FICOandInitialRatingAgencyCNLExpectationsforPublicABSTransactions) q/q (also on sub-prime deal Q4 0.15 0.21 0.50

in market this week impacting future GoS) and higher provisioning from ramp in FY 2.63 2.45 2.95

Tier-2 penetration. See Table 1KMXSumaryModelfor our estimate changes. Style Exposure

Setup for shares - recent rally skews risk-reward to the downside again, though

2H26 analyst day expectations could lend near-term support: On our estimates,

KMX shares are now trading at ~17x FY2 P/E, back to historical average levels and

its widest discount to franchise peers despite no imminent signs of sustained

industry outperformance with ongoing price actions (F1Q SS units are down -1%

vs. industry estimated +1% and on 2-yr comp F1Q SS units +7% vs. industry +9%).

In several periods since 2023, we have seen the tendency for KMX shares to

prematurely gravitate to a premium given the ‘hope’ for FY2 earnings inflection.