• In February 2026, CarMax, Inc. became the first U.S. auto retailer with a car-shopping app in the ChatGPT app store, letting users search its more than 45,000-vehicle inventory and access vehicle value information through conversational queries.
• This move extends CarMax’s existing AI capabilities into a new channel, potentially reshaping how customers begin their buying and selling journeys by meeting them directly within an emerging AI platform.
• We’ll now assess how integrating CarMax’s inventory and offer tools into ChatGPT could influence its investment narrative built around digital growth.

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CarMax Investment Narrative Recap

To own CarMax today, you need to believe its omnichannel model and technology investments can still translate into healthier margins and steadier earnings, despite recent profit pressure and soft share price performance. The new ChatGPT app fits that digital growth story, but its short term impact on key catalysts like margin stabilization and loan loss provisioning is likely limited, while competition for used vehicle supply and financing risk remain central concerns.

Among recent developments, CarMax’s ongoing share repurchase program stands out alongside this AI push. Management has bought back more than 113.7 million shares for about US$7.2 billion since 2012, even as earnings growth has been uneven and revenue is forecast to be broadly flat. For investors tracking catalysts, this combination of heavy buybacks and new digital channels may matter most when the next set of earnings clarifies how well costs and margins are being managed.

But against that digital promise, investors should be aware of the risk that rising loan loss provisioning could...

CarMax's narrative projects $29.8 billion revenue and $919.9 million earnings by 2028. This requires 1.3% yearly revenue growth and about a $361 million earnings increase from $558.5 million today.

Uncover how CarMax's forecasts yield a $38.31 fair value, a 9% downside to its current price.

Exploring Other Perspectives

While this ChatGPT integration could eventually support CarMax’s omnichannel ambitions, the most bearish analysts were already assuming only about US$28.3 billion of revenue and roughly US$570 million of earnings by 2028, so you should recognize that some expect heavier pressure on margins and slower payoffs from these tech investments than the consensus implies.

Explore 6 other fair value estimates on CarMax - why the stock might be worth over 2x more than the current price!

Form Your Own Verdict

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your CarMax research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free CarMax research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate CarMax's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.