KAR Auction Services Inc (KAR)vsCarMax Inc (KMX)
KAR
KAR Auction Services Inc
$30.88
+0.36%
CONSUMER CYCLICAL · Cap: $3.28B
KMX
CarMax Inc
$41.88
-0.52%
CONSUMER CYCLICAL · Cap: $6.18B
Smart Verdict
WallStSmart Research — data-driven comparison
CarMax Inc generates 1369% more annual revenue ($27.83B vs $1.90B). KAR leads profitability with a 9.0% profit margin vs 1.6%. KMX appears more attractively valued with a PEG of 0.66. KAR earns a higher WallStSmart Score of 65/100 (B-).
KAR
Strong Buy65
out of 100
Grade: B-
KMX
Buy54
out of 100
Grade: C-
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
+24.2%
Fair Value
$40.72
Current Price
$30.88
$9.84 discount
Margin of Safety
-120.8%
Fair Value
$20.74
Current Price
$41.88
$21.14 premium
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Earnings expanding 108.3% YoY
Reasonable price relative to book value
Reasonable price relative to book value
Growing faster than its price suggests
Attractively priced relative to earnings
Generating 1.1B in free cash flow
Areas to Watch
Premium valuation, high expectations priced in
Distress zone — elevated risk
ROE of 7.5% — below average capital efficiency
1.6% margin — thin
Operating margin of 1.8%
Comparative Analysis Report
WallStSmart ResearchBull Case : KAR
The strongest argument for KAR centers on EPS Growth, Price/Book. PEG of 1.34 suggests the stock is reasonably priced for its growth.
Bull Case : KMX
The strongest argument for KMX centers on Price/Book, PEG Ratio, P/E Ratio. PEG of 0.66 suggests the stock is reasonably priced for its growth.
Bear Case : KAR
The primary concerns for KAR are P/E Ratio.
Bear Case : KMX
The primary concerns for KMX are Altman Z-Score, Return on Equity, Profit Margin. Debt-to-equity of 2.75 is elevated, increasing financial risk. Thin 1.6% margins leave little buffer for downturns.
Key Dynamics to Monitor
KMX carries more volatility with a beta of 1.33 — expect wider price swings.
KAR is growing revenue faster at 8.4% — sustainability is the question.
KMX generates stronger free cash flow (1.1B), providing more financial flexibility.
Monitor AUTO & TRUCK DEALERSHIPS industry trends, competitive dynamics, and regulatory changes.
Bottom Line
KAR scores higher overall (65/100 vs 54/100). Both earn "Strong Buy" and "Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
KAR Auction Services Inc
CONSUMER CYCLICAL · AUTO & TRUCK DEALERSHIPS · USA
KAR Auction Services, Inc. provides used vehicle auctions and related vehicle remarketing services for the automotive industry in the United States, Europe, Canada, Mexico, and the United Kingdom. The company is headquartered in Carmel, Indiana.
CarMax Inc
CONSUMER CYCLICAL · AUTO & TRUCK DEALERSHIPS · USA
CarMax is a used vehicle retailer based in the United States. It operates two business segments: CarMax Sales Operations and CarMax Auto Finance.
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