By the initial looks of things, used-car dealer CarMax (KMX) seems an incredibly risky wager. Right off the bat, Barchart warns prospective investors that the technical profile of KMX stock sits as a 56% Sell. It’s not the absolute worst outlook but by no means is it positive. Further, analyst consensus – while coming in as a Moderate Buy – is definitely mixed. How then should market participants approach CarMax?
While it goes against conventional wisdom, KMX stock could be an intriguing upside opportunity. Granted, the idea is extremely speculative. Since the start of the year, CarMax lost almost 6% of equity value. In the trailing 52 weeks, it’s down nearly 9%, with the auto dealership struggling for momentum amid consumer headwinds, particularly elevated inflation and high borrowing costs.
