Is CarMax, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for CarMax, Inc. has moved from very attractive to fair. The company is currently fairly valued based on its financial metrics. Key ratios include a P/E ratio of 20, a Price to Book Value of 1.60, and an EV to Sales ratio of 1.06. In comparison, Penske Automotive Group, Inc. has a more attractive P/E ratio of 12.91, indicating that CarMax is trading at a premium relative to some of its peers.
The stock has significantly underperformed against the S&P 500, with a year-to-date return of -47.53% compared to the index's 13.30%. This stark contrast reinforces the notion that CarMax is fairly valued but may face challenges in regaining investor confidence in the near term.