$KMX — AVOID 📊 | 6 MONTHS THESIS

🧭 Conviction: MED CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. 🎯 FQ1 FY2027 (ends May) | reported Jun 17 | Rev $8.0B | Adj EPS $1.31 vs $0.94 🟢 💡 Consensus underestimated Q1 earnings; now the market may over-extrapolate the beat, expecting continued high growth. The gap is that earnings growth likely normalizes, and the premium valuation will compress toward historical and peer averages. 🏢 Business Quality: 7 — dominant used-car retailer with strong brand, but capital-intensive and highly cyclical/10 📊 Valuation: rich; trailing non-GAAP P/E 33.3x vs peer band 7.7–14.4–27.8x and base P/E target $43.68 implying -14.4% downside; bull target $100.11 depends on... 🔮 Catalyst: Next quarterly report (FQ2 FY2027) ⚖️ Avoid; strong Q1 beat is already reflected in premium valuation of 33.3x P/E against a cyclical peer band high of 27.8x, with no near-term catalyst to drive further upside; risk/reward at 0.3:1 fai

🧭 Conviction: MED