Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Achieving those goals is made easier with the Zacks Style Scores, a unique set of guidelines that rates stocks based on popular investing methodologies, namely value, growth, and momentum. The Style Scores can help you narrow down which stocks are better for your portfolio and which ones can beat the market over the long-term.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

CarMax (KMX)

Headquartered in Richmond, VA, CarMax is the largest retailer of used vehicles in the United States. In fiscal 2025 (ended Feb 28, 2025), CarMax retailed 790,000 used vehicles. The company is also one of the nation’s largest operators of wholesale vehicle auctions, with 540,000 vehicles sold in fiscal 2025.

KMX sits at a Zacks Rank #3 (Hold), holds a Value Style Score of B, and has a VGM Score of B. Compared to the Automotive - Retail and Wholesale - Parts industry's P/E of 20.2X, shares of CarMax are trading at a forward P/E of 17X. KMX also has a PEG Ratio of 1.1, a Price/Cash Flow ratio of 12.4X, and a Price/Sales ratio of 0.4X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.00 to $3.82 per share. KMX has an average earnings surprise of 6.9%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding KMX to their portfolios.

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CarMax, Inc. (KMX):Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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