KMX
CarMax, Inc.
$51.55
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 10.1% below fair value
You pay
$51.55
Bear
$45.86
Fair
$57.33
Bull
$68.80
Bear
$45.86
-11.0%
$3.82 × 12x P/E
Fair
$57.33
+11.2%
$3.82 × 15x P/E
Bull
$68.80
+33.5%
$3.82 × 18x P/E
Adjust Assumptions
15.0x
3.82$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
13.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (37 analysts)
$60.63
Divergence from AlphaVal
5%
Summary
Applying a 15x P/E to adjusted EPS of $3.82, the base-case value is $57.33 per share.
Warnings
The company's reported profits differ from official accounting profits by 128%. Check what costs are being left out of the adjusted number.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples