• Giverny Capital Asset Management disclosed in its fourth-quarter 2025 investor letter that it had fully exited its long-term holding in CarMax, criticizing management for not adjusting effectively to a tougher used car market marked by expensive vehicles, higher financing costs, and limited supply of 2–5 year-old cars.
• The move underscores how even long-term institutional holders can lose confidence when a retailer’s costly investments, such as CarMax’s omnichannel platform, fail to translate into clear market share gains in a shrinking core segment.
• With this backdrop, we’ll examine how Giverny’s exit amid rising used car prices reshapes CarMax’s investment narrative for current and prospective investors.

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What Is CarMax's Investment Narrative?

To stay on board as a CarMax shareholder, you need confidence that its omnichannel model and nationwide footprint can still convert demand in a tougher used car market, despite modest revenue pressure and low but positive profitability. Near term, the key catalysts remain execution on cost control, progress under the interim CEO, and any sign that unit volumes and margins stabilize when Q4 results land in April. Giverny Capital’s high‑profile exit adds a reputational overhang, but by itself is unlikely to change the core fundamentals or catalysts, especially given management is still buying back stock after a sharp multi‑year share price drawdown. The bigger swing factors are used vehicle affordability, financing conditions, and whether CarMax’s investments finally show up in market share rather than just higher expenses.

However, there is one operational risk here that current and future investors should not overlook. Despite retreating, CarMax's shares might still be trading 31% above their fair value. Discover the potential downside here.

Exploring Other Perspectives

Five Simply Wall St Community valuations for CarMax span roughly US$38 to almost US$100 per share, underlining how differently retail investors are sizing up the business. Set that against the current debate over management’s ability to turn heavy omnichannel spending into sustained profit growth and you can see why it pays to weigh multiple views on CarMax’s next chapter.

Explore 5 other fair value estimates on CarMax - why the stock might be worth 14% less than the current price!

Build Your Own CarMax Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your CarMax research is our analysis highlighting 2 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.