After Carmax Plunges to 52-Week Low -- Is Carvana Next to Fall?

"Carmax ( ) stock plunged to a 52-week low last week after Q2 earnings missed estimates. The company cited "challenging" conditions due to weak used-car sales and rising loan losses leading to revenue of $6.6 billion against $7 billion expected and earnings of $0.64 per share versus $1.05 forecast. Meanwhile, Carvana ( ) trades only 10% below the all-time high of $413 per share hit in July, up 81% in 2025."

"Carmax's Q2 saw retail used-car sales drop 5.4% to 200,000 units, with comparable-store sales down 6.3%. Wholesale units fell 2.2%, reducing total vehicle sales 4.1% to 338,000. The year-over-year revenue decline was the first in years. The primary culprit was high interest rates reducing affordability for KMX's middle-income customers. Used-car prices dropped 1.6% in wholesale markets, but demand stayed low. Carmax Auto Finance income also fell, with loan-loss provisions rising due to higher delinquencies."

CarMax reported Q2 revenue of $6.6 billion and EPS of $0.64, missing expectations and sending the stock to a 52-week low. Retail used-car sales declined 5.4% to 200,000 units, comparable-store sales fell 6.3%, and total vehicle sales dropped 4.1% as wholesale units slid 2.2%. High interest rates reduced affordability, wholesale prices fell 1.6%, and finance income weakened with rising loan-loss provisions. The stock lost about 21% and roughly $1.5 billion in market value, and analysts downgraded the name despite stable gross profit per unit of $2,216 and modest 2026 growth guidance. Carvana posted contrasting strength with 143,000 Q2 retail sales (up 41%), $4.8 billion revenue, $601 million adjusted EBITDA, $308 million net income, and $3,734 gross profit per unit, driving a strong stock rally.

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