Exploring CarMax, Inc. (KMX) Investor Profile: Who’s Buying and Why?

You're looking at CarMax, Inc. (KMX) and asking the right question: with the stock trading around $34.20 per share as of November 2025, who is actually buying and why, especially after a tough year? The data shows a complex picture: while the company closed its fiscal year 2025 with annual revenue of $28.21 billion, its most recent quarter (Q2 FY2026) saw net earnings per diluted share drop to $0.64, missing analyst estimates. This volatility is reflected in institutional movements, where a staggering 40.3 million shares were sold by institutions in the last quarter, significantly outweighing the 15.9 million shares bought, signaling a clear net-selling trend among major players. But here's the thing: despite the net outflow, giants like Vanguard Group Inc. and BlackRock, Inc. remain top holders, collectively owning millions of shares-so are they doubling down on the long-term omnichannel strategy, or just rebalancing their massive index positions? We need to look past the headline numbers to see if this is a value play on a used-car market rebound, or a defintely necessary risk-off move by the smart money.

Who Invests in CarMax, Inc. (KMX) and Why?

If you're looking at CarMax, Inc. (KMX) today, you're seeing a stock with a highly concentrated and somewhat conflicted investor base. The short answer is that the company is overwhelmingly owned by large institutions, but the recent narrative is a battle between long-term growth investors betting on the omnichannel model and short-term traders reacting to market volatility.

The institutional ownership is massive, sitting at approximately 106.51% of the shares outstanding as of late 2025. This figure, which is over 100%, is a sign of significant short interest, meaning a large number of shares are being borrowed and sold by bearish investors. This high institutional control means retail investors, while numerous, own a relatively small slice of the overall float.

• Institutional Investors: Own over 106% of shares outstanding.
• Retail Investors: Hold the remaining float, often representing a contrarian or long-term view.
• Hedge Funds: Showed a net selling trend in Q3 2025, offloading roughly 40.3 million shares while buying 15.9 million.

Key Investor Types and Their Footprint

The investor base for CarMax, Inc. (KMX) is dominated by passive index funds and major asset managers. These institutions are not making a directional bet on the used car market; they are simply mirroring the stock's weight in major indices like the S&P 500.

The top three institutional holders alone account for a huge portion of the company. Vanguard Group Inc. and BlackRock, Inc. are the two largest, holding over 11% each. For instance, Vanguard Group Inc. holds about 16.899 million shares, and BlackRock, Inc. holds approximately 16.739 million shares, as of the third quarter of 2025. State Street Global Advisors, Inc. is the third largest, with around 5.541 million shares. That's a lot of passive money. You can find more details on the company's foundation and structure at CarMax, Inc. (KMX): History, Ownership, Mission, How It Works & Makes Money.

Here's the quick math: with approximately 146.85 million shares outstanding, the concentration of ownership is a critical factor in the stock's volatility. When a few large funds rebalance, the stock moves. Retail investors, on the other hand, are often the ones trying to catch a falling knife, or buying into the long-term turnaround story.

Investment Motivations: Growth vs. Value

The investment thesis for CarMax, Inc. (KMX) is a tug-of-war between a long-term growth story and a deep-value play on a cyclical recovery. The company's decision not to pay a cash dividend confirms its focus on reinvesting capital for growth, not returning it to shareholders.

Growth Prospects (The Bull Case): Investors are attracted to CarMax, Inc.'s dominant market position as the largest used-car retailer in the U.S. and its successful transition to a true omnichannel (integrated physical and digital) model. Management reported that 67% of retail unit sales were omnichannel in the fourth quarter of fiscal year 2025, up from 64% the prior year. This digital edge, plus the record gross profit per retail unit of $2,322 in Q4 FY2025, suggests operational efficiency is working.

Value Proposition (The Turnaround Case): The stock's price has been under pressure, falling nearly 59% year-to-date through November 2025, which attracts value investors. They see the current price, around $33.44 per share, as deeply discounted compared to some analyst fair value estimates of $54.64 per share. This is a bet on the eventual stabilization of the used-vehicle market and the company's ability to manage its high debt load. Honestly, it's a high-risk, high-reward situation right now.

Investment Strategies in Play

You see three main strategies at work with CarMax, Inc. (KMX) right now, all reflecting the current market uncertainty:

• Long-Term Holding (Growth/Value): These are the patient investors, including many of the large mutual funds, who are holding based on the belief that the omnichannel platform will eventually drive market share past the current 3.7% target toward the company's ambitious 5% goal. They view the current downturn as temporary.
• Short-Term Trading (Volatility/Catalyst): This group is trading around earnings reports and news of leadership changes, like the recent CEO transition. They are looking for quick gains from volatility, especially given the stock's sharp price movements. For example, the stock jumped 4.4% on news of a nationwide at-home pickup service launch in November 2025.
• Activist/Hedge Fund (Short Selling): The high institutional ownership percentage over 100% signals aggressive short selling. These investors are betting that macroeconomic headwinds-like high interest rates impacting CarMax Auto Finance (CAF) income, which was $159.3 million in Q4 FY2025-and competition will continue to pressure sales volumes and margins, driving the price down further. The significant net selling by institutions in Q3 2025 supports this bearish sentiment.

The company also uses share repurchases as a key strategy to return capital, buying back $98.5 million worth of shares in the fourth quarter of fiscal year 2025. This is a classic move to support the stock price and boost earnings per share (EPS), which surged 81.3% to $0.58 in Q4 FY2025. The management defintely believes the stock is undervalued.

Institutional Ownership and Major Shareholders of CarMax, Inc. (KMX)

You want to know who is driving the action in CarMax, Inc. (KMX) stock, and for good reason. Institutional investors-the mutual funds, pension funds, and asset managers like BlackRock, Inc.-hold the vast majority of shares, making their moves the single biggest driver of the stock's near-term volatility and long-term strategy. Honestly, their collective sentiment is what matters most.

As of the most recent filings, institutional ownership in CarMax, Inc. sits at an exceptionally high level, around $\mathbf{108.68\%}$ of the float. This figure, over 100%, happens because of short selling and other complex trades, but the simple takeaway is that these large entities control virtually all the tradable stock. They hold a total of approximately $\mathbf{174,021K}$ shares.

Top Institutional Investors and Their Holdings

The list of major holders is dominated by the giants of passive and active money management. These firms hold massive positions, often valued in the hundreds of millions of dollars, which means their investment decisions are not just about KMX, but about their overall portfolio construction.

Here's the quick math on the largest institutional holders by reported value in the 2025 fiscal year:

• Vanguard Group Inc.: The largest holder, with a stake valued at approximately $\mathbf{\$758.27M}$. They hold $\mathbf{4,892K}$ shares, representing $\mathbf{3.33\%}$ ownership.
• Janus Henderson Group PLC: A significant active manager, holding an estimated $\mathbf{\$381.98M}$.
• State Street Corp: Another index fund powerhouse, with holdings near $\mathbf{\$381.00M}$.
• BlackRock, Inc.: A key player, holding approximately $\mathbf{12.1M}$ shares as of March 2025.

These massive positions-especially those held by Vanguard Group Inc. and BlackRock, Inc.-are often tied to index funds (like the S&P 500), which are passive investments. This means a significant portion of the ownership is not actively trading based on CarMax, Inc.'s daily news, but rather on its inclusion in a benchmark index.

Recent Shifts: Are Institutions Buying or Selling?

In the most recent quarter (Q3 2025), the sentiment has been mixed, but the trend points toward a net reduction in overall exposure. Total shares owned by institutions decreased by $\mathbf{7.80\%}$ over the last three months. This is a clear signal of caution in the used car retail sector.

We saw $\mathbf{523}$ institutional investors decrease their positions, while only $\mathbf{293}$ added shares. That's a two-to-one ratio of sellers to buyers. One clean one-liner: More funds are heading for the exit than the entrance.

The largest sales came from firms like PRINCIPAL FINANCIAL GROUP INC, which removed $\mathbf{2,409,710}$ shares, and DIAMOND HILL CAPITAL MANAGEMENT INC, which cut $\mathbf{2,128,619}$ shares, a $\mathbf{30.6\%}$ reduction in their position. On the buy side, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP added $\mathbf{1,494,205}$ shares, and VULCAN VALUE PARTNERS, LLC added $\mathbf{1,338,134}$ shares.

Here's the quick math on the net activity in Q3 2025:

This tells me that while the passive money is sticky, a significant number of active managers are taking chips off the table, likely due to the stock's performance-it saw a $\mathbf{55.39\%}$ decline in price from November 2024 to November 2025 [cite: 3 from first search].

The Role of Large Investors in KMX's Strategy

Institutional investors are not just traders; they are powerful stakeholders who influence corporate governance (the system of rules, practices, and processes by which a company is directed and controlled). Their sheer size means they can push for operational or strategic changes.

For CarMax, Inc., this influence became concrete in January 2025 when the company amended its Bylaws to allow shareholders with a minimum $\mathbf{20\%}$ stake to call a special meeting. This is a direct response to shareholder engagement, giving large investors a stronger voice outside of the regular annual meeting schedule, enhancing transparency.

In terms of stock price, this heavy institutional ownership means the stock is prone to volatility (unsystematic risk) when a few large funds decide to move a significant block of shares. For example, a sudden sell-off by a major holder can create a price shock that has nothing to do with the company's core business of selling cars and providing financing through CarMax Auto Finance (CAF).

The core strategy remains the omnichannel transformation-blending physical stores with a strong digital experience. Institutional investors frequently engage with management on corporate governance and responsibility matters, ensuring the company stays focused on this capital-intensive, high-growth path. If you're assessing the risks and opportunities here, you should also be Breaking Down CarMax, Inc. (KMX) Financial Health: Key Insights for Investors.

Key Investors and Their Impact on CarMax, Inc. (KMX)

The investor profile for CarMax, Inc. (KMX) is dominated by large, passive institutional money, which means the stock's movements are often tied to broad market index performance, but their recent moves show a distinct reaction to the company's financial health, particularly in its financing arm.

The sheer scale of institutional ownership, sitting at approximately 108.05% of shares outstanding, tells you that the major players are not small-time hedge funds but giants like Vanguard Group Inc and BlackRock, Inc. These firms hold CarMax, Inc. largely through their index funds, making them long-term, passive holders. To be fair, this passive ownership provides a strong, stable floor for the stock, but it also means the company's stock price is highly sensitive to overall market sentiment toward the retail and auto finance sectors.

The Big Two: Vanguard and BlackRock's Positions

As is common with S&P 500 and total market index components, Vanguard Group Inc and BlackRock, Inc. are the two largest shareholders. Their influence is primarily through proxy voting on corporate governance issues, rather than through activist campaigns. They are the definition of 'set it and forget it' investors, but their sheer size makes them defintely influential.

Here's the quick math on their recent activity, demonstrating a clear signal from BlackRock in late 2025:

• BlackRock, Inc.: Made a significant move on October 31, 2025, acquiring an additional 5,266,354 shares at a price of $41.91 per share. This boosted their total stake to 16,748,605 shares. They are buying on the dip.
• Vanguard Group Inc: Remains one of the top holders, reflecting its broad market index strategy.

This BlackRock move is notable because it signals a belief that the stock is undervalued following a period of market pessimism, despite the fact that the holding is a modest 0.01% of BlackRock's total portfolio. That's a massive vote of confidence in CarMax, Inc.'s long-term model, even with near-term headwinds.

Recent Investor Shifts and Market Scrutiny

The third quarter of fiscal year 2026 (which ended in late 2025) saw a clear divergence in investor sentiment, driven by the company's recent earnings miss. While some investors were adding, others were cutting bait on CarMax, Inc. due to concerns over its in-house financing arm, CarMax Auto Finance (CAF).

The major selling activity in Q3 2025 was significant. For example, Principal Financial Group Inc removed 2,409,710 shares, a massive -93.7% reduction in their position. Also, Diamond Hill Capital Management Inc cut their stake by 2,128,619 shares, a -30.6% change. These are not small adjustments; these are portfolio managers signaling a loss of confidence in the near-term outlook.

On the flip side, some active managers saw a buying opportunity. Arrowstreet Capital Limited Partnership added 1,494,205 shares, and Vulcan Value Partners LLC added 1,338,134 shares in Q3 2025. This split shows a classic value vs. risk debate playing out in the used-car market.

Investor Influence and the Loan Loss Crisis

The most direct form of negative investor influence in late 2025 came not from a hedge fund activist but from legal action. Following the company's September 2025 earnings release, which showed net earnings per diluted share of only $0.64 (missing the $1.03 consensus) and a surge in the provision for loan losses, several firms initiated securities fraud class action lawsuits.

This is a critical risk you need to track. The core allegation is that management may have misled investors about the quality of the CAF loan portfolio, which is a big deal since CarMax, Inc. retailed and wholesaled a combined total of 1,333,362 used vehicles in fiscal 2025, with a significant portion financed in-house. This legal pressure forces the board and management to be hyper-transparent about credit quality going forward. It can also lead to a change in leadership, as seen with the termination of a key executive in November 2025. If you want a deeper dive into the numbers behind this, you should look at Breaking Down CarMax, Inc. (KMX) Financial Health: Key Insights for Investors.

The takeaway is simple: the passive majority provides stability, but the active minority and legal challenges are driving the near-term stock price and forcing operational changes.

Market Impact and Investor Sentiment

You're looking at CarMax, Inc. (KMX) and seeing a lot of mixed signals, and honestly, the institutional money is sending a clear caution flag right now. While the company still has 1,970 institutional shareholders, the overall sentiment is leaning toward neutral-to-negative, driven by a significant net outflow of capital in the most recent quarter.

Specifically, in the last quarter, institutions sold off approximately 40.3 million shares while only buying about 15.9 million shares, showing a clear preference for reducing exposure. Total shares owned by institutions decreased by 7.80% to 174,021K shares in the three months leading up to mid-November 2025. That's a big chunk of selling, so you need to pay attention to who is stepping back.

Here's the quick math on some of the largest recent exits, which tells you the scale of the de-risking:

• PRINCIPAL FINANCIAL GROUP INC removed 2,409,710 shares in Q3 2025, a massive 93.7% cut.
• DIAMOND HILL CAPITAL MANAGEMENT INC reduced its position by 2,128,619 shares, or 30.6%, in the same quarter.

Recent Market Reactions and Volatility

The stock market has been volatile for CarMax, Inc. (KMX) in late 2025, with major news acting as a short-term catalyst against a backdrop of deep-seated negative momentum. The stock's year-to-date loss is nearly 59% as of mid-November 2025, so the fading momentum is real.

The abrupt termination of CEO Bill Nash and the appointment of David McCreight as interim CEO, for instance, caused a single-day share price jump of 4.1%. That move suggests investors were relieved by a change in leadership, even if the change was sudden. Also, the company's new digital initiatives, like the nationwide at-home pickup service and the 'Offer Watch' tool, were met with a positive stock reaction, pushing shares up 4.4% on the news. This shows that the market is defintely rewarding strategic, customer-focused innovation.

What this estimate hides is the underlying pressure. The CEO change followed disappointing Q3 earnings guidance, which projected an 8% to 12% decline in comparable store unit sales. Plus, the company is facing multiple securities class action lawsuits alleging misleading growth statements, which adds a layer of legal risk and investor uncertainty. You can dive deeper into the operational challenges in Breaking Down CarMax, Inc. (KMX) Financial Health: Key Insights for Investors.

Analyst Perspectives and Fiscal 2025 Outlook

The consensus among Wall Street analysts reflects the uncertainty, settling on a 'Reduce' or 'Hold' rating. They are mapping the near-term risks to tangible numbers, which is why the average one-year price target was recently revised down to $44.20 per share, a 22.30% decrease from the prior estimate of $56.88.

The primary concern is the company's ability to navigate a challenging used-car market and the potential impact of high interest rates on financing. Here's how the fiscal year 2025 data and projections stack up:

The bear case for the full fiscal year 2025 is stark, with operating earnings per share (EPS) projected to land between $0.27 and $0.45. This is a significant drop-off from the prior year. The investment narrative now hinges on whether CarMax, Inc.'s omnichannel strategy can stabilize sales and defend margins against credit risk and margin pressures, especially given the expected decline in comparable store sales.