10:35 AM EDT, 09/25/2025 (MT Newswires) -- CarMax's ( KMX ) underperformance in Q2 has amplified investor concerns about its ability to sustain market leadership and drive additional growth, Wedbush said in a Thursday note.

In Q2, the company delivered results that fell short of Street expectations across all key metrics, including revenue, retail sales, and diluted EPS, Wedbush analysts said. They also noted the "weak" figures in used retail unit volume growth, retail average selling price, and retail gross profit, which were all below expectations.

Despite the percentage of units sold and financed by CarMax Auto Finance exceeding the consensus estimate by around 50 basis points, CAF income for Q2 was lower than Street estimates, mainly due to a higher provision for loan losses, the analysts said.

The analysts believe the narrative around CarMax ( KMX ) has "turned cautious," with the company now losing market share at an accelerating pace relative to its closest competitor.

Wedbush downgraded the company's stock rating to neutral from outperform and reduced the price target to $54 from $84.

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