KMX slumps over 5% as price action remains under pressure even with rising sales

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Carmax slides 5.01% today to $56.27

Highlights

CarMax reported second quarter revenue of $7.88 billion, up 19.5% year over year, and earnings per share of $1.16, an increase of approximately 81%.
The company will resume share repurchases in the third quarter, with $1.31 billion still authorized, and comparable used-vehicle sales climbed 13%.
Shares of CarMax fell 5.01%, trading below short- and medium-term averages, with mixed technical momentum and a projected five-day range of $52.08 to $60.46.

Earnings surge and buyback plans outpaced by sustained selling flows

CarMax reported fiscal Q2 2027 results with revenue of $7.88 billion, representing a 19.5% year-over-year increase, and earnings per share of $1.16, up approximately 81% from the prior year. The company announced it will resume share repurchases in the third quarter with $1.31 billion still authorized. Comparable used-vehicle sales grew by 13% and total unit sales were up 15%, supported by improved price competitiveness, operational efficiencies, and higher auto finance income, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, takes a cautious view on CarMax after the pronounced downside move and breakdown below key moving averages. He notes selling pressure has persisted despite management's attempt to boost sentiment through share repurchases and strong financials. Technical setups remain fragile, with negative MACD, neutral ADX, and the price unable to push above resistance. Volume and price action imply sellers remain in control and near-term momentum is skewed to the downside. 'Unless CarMax regains and holds above $59.14 with conviction, any upside should be treated as a short-lived bounce in a risk-off environment,' warns Kharitonov.

Viktoras Karapetjanc, expert at Traders Union, highlights CarMax’s impressive earnings momentum and resumed buybacks as signs the bullish structure remains intact. He sees strong fundamental recovery in unit sales and revenue growth driving long-term optimism, with operational improvements well received by the market. The technicals are not yet fully supportive, yet the company’s forward-looking actions offer a constructive setup. He expects further growth once short-term selling abates. "With fundamentals strengthening and management signaling confidence, I believe CarMax is positioned for renewed upside once resistance at $59.14 is reclaimed," says Karapetjanc.

Parshwa Turakhiya, analyst, recognizes a blend of volatility and indecision for CarMax in the near term. He points to mixed momentum signals and an overbought Stochastic RSI, suggesting possible short-term reversals or range-bound action. Recent news has spurred intraday activity, but technical levels will determine forward direction. A wait-and-see stance suits active traders as the stock’s bias could shift quickly on a breakout or breakdown. "Traders should watch for a decisive move beyond $59.14 or below $56.25, as either could unlock opportunity in the coming sessions," Turakhiya concludes.

Mixed technical signals as short-term resistance clashes with bullish bias

CarMax is trading below the 20-day and 50-day moving averages at $59.43 and $59.44, indicating short- and medium-term pressure from sellers, but remains well above the 200-day at $47.98, signaling continued long-term bullish alignment. The Ichimoku Kijun at $60.14 sits above the current price and acts as near-term resistance, while support and resistance are set at $56.25 and $59.14. Momentum signals are mixed: the MACD is negative, showing selling pressure, and the ADX signals a neutral trend. The RSI reads 51.17 and suggests a buy, with Stochastic RSI elevated at 75.75 (Strong Buy), hinting at near-term overbought conditions. The CCI is neutral, and Bull/Bear Power remains positive at 5.36, reflecting dominance by buyers intraday, but also highlights an overbought setup. The stock gapped lower by $0.09 at the open and is trading near session lows, with intraday volatility at 5.14%. While some oscillators have yet to fully confirm a bearish reversal, the overall tone remains risk-off.

Earlier, analysts noted that despite robust earnings and a resumed share buyback program CarMax was facing short- and medium-term technical pressures that limited upside momentum. The latest market action adds a new dimension by emphasizing increased volatility and a high probability of sideways consolidation, making it crucial for traders to monitor a potential breakout above $59.14 or a breakdown below $56.25 for the next directional move.

Source of Data: KMX Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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