Is CarMax, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for CarMax, Inc. has moved from very attractive to fair, indicating a shift in its perceived value. 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 a PEG Ratio of 2.76, which suggest that while the company is not undervalued, it also does not present a compelling investment opportunity at this time.
In comparison to its peers, Penske Automotive Group, Inc. shows a more attractive P/E ratio of 12.91 and a significantly lower EV to EBITDA of 14.17, highlighting that CarMax may not be the best choice in its sector. Furthermore, CarMax's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -47.53% compared to the S&P 500's 13.30%, reinforcing the notion that the stock is not currently a strong investment.