CarMax (NYSE: KMX) saw a 53% drop in shares in 2025 as sales declined. Competitor Carvana is thriving, with a 44% increase in units sold. CarMax CEO resigned, adding investor concern. Stock now trades at a P/E ratio of 15. Profit margins are decreasing as unit volumes decline.

Investors should question whether CarMax can stabilize market share lost to Carvana. Fixed costs require consistent unit volume for profit. If CarMax can regain momentum and stabilize margins, stock may perform well. However, competition poses a threat to further decline.

Motley Fool Stock Advisor did not include CarMax among the 10 best stocks for investors to buy now. Previous recommendations have yielded significant returns, outperforming the S&P 500. Join the investing community to access the latest top 10 list and potentially high-performing stocks. *Stock Advisor returns as of January 12, 2026.

Read more at Yahoo Finance: Why CarMax Stock Slipped 53% In 2025