CarMax, Inc. (KMX) DCF Valuation
A meaningful DCF fair value isn't available for CarMax, Inc. (KMX) — its free-cash-flow and net-debt profile makes a standard discounted-cash-flow model unreliable (common for loss-makers and high-net-debt or recently-public companies), and no analyst DCF is published. Explore your own assumptions with the editable model below.
What would today's price require?
$52.76 is justified only if free cash flow grows about +35.8% a year (fading to 2.5% long-run) at a 10.1% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 11.1% | N/A |
| Base case | 2.4%/yr | 10.1% | N/A |
| Optimistic | 5.4%/yr | 9.1% | N/A |
| Analyst DCF (FMP) | independent reference — different model | $73.59 | |
Current Price
$52.76
Market-Implied Growth
+35.8%/yr
vs +13.8% 5Y actual
Base-Case Model Value
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KMX DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for KMX (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $508.6M · 0.14B shares · net debt $17.1B
Estimated Fair Value
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These assumptions imply no positive equity value — try a higher growth or lower discount rate.
About CarMax, Inc.
CarMax, Inc., together with its associated entities, functions as a prominent purveyor of previously owned automobiles across the United States. Its business operations are strategically structured into two principal divisions: CarMax Sales Operations and CarMax Auto Finance. Through its retail offerings, the company provides an extensive selection of pre-owned vehicles, including various domestic, imported, and luxury models, in addition to hybrid and electric options. Customers also have the opportunity to purchase extended protection plans at the time of their vehicle acquisition. Separately, CarMax sells older, higher-mileage vehicles—typically around ten years old with over 100,000 miles—via wholesale auctions. Furthermore, CarMax delivers reconditioning and repair services for its vehicles. For its retail clients, the company facilitates a range of financing alternatives designed to accommodate diverse credit profiles, managed both by its internal CarMax Auto Finance segment and through arrangements with various external financial institutions. As of February 28, 2022, CarMax operated a network comprising approximately 230 retail locations specializing in used cars. Founded in 1993, CarMax, Inc. maintains its corporate headquarters in Richmond, Virginia.
- Sector
- Consumer Cyclical
- Industry
- Auto - Dealerships
- CEO
- Keith Barr