CarMax faces risks from fluctuating vehicle values, increased loan losses (especially for 2022-2023 originations), potential macroeconomic downturns, changes in consumer credit availability, and reliance on third-party finance providers. The company's wholesale vehicle sales and average selling prices are also subject to market fluctuations. There are also risks associated with meeting financial covenants in debt agreements and potential issues with warehouse facilities.
Financial Upside
CarMax anticipates profitable market share gains through its omni-channel platform, which is gaining traction with customers. The company plans to increase efficiency in logistics and reconditioning, potentially saving $200 per retail unit. Expanding into new markets and increasing used EV sales are also potential growth drivers. The company also has a share repurchase program with $2.15 billion remaining.
