MeritValue

CARMAX INC

KMXdata completeness 100%18 fiscal years on file
The thesis, from the filings

CARMAX INC earns about 3% on invested capital, and has bought back 11% of its shares over 5 years. The applicable estimate puts fair value near $34.03 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2024FY 2025FY 2026
Revenue$31.9B1$29.7B2$26.5B3$26.4B3$25.9B3
Net income$1.15B4$484.8M5$479.2M6$500.6M6$247.3M6
Operating cash flow−$2.55B7$1.28B8$458.6M9$624.4M9$1.78B9
Capital expenditure$308.5M10$422.7M11$465.3M12$467.9M12$541M12
Free cash flow (derived)−$2.86B7$860.6M8−$6.69M9$156.5M9$1.24B9
Total debt$18.2B13$17.9B14$18.3B15$18.2B16$17.5B16
Cash & equivalents$102.7M17$314.8M18$574.1M19$247M19$122.8M19
Diluted shares165.2M159.8M158.7M156.1M147.6M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$398.94
your share of equity
Profit it earned you last year
$16.75
Free cash flow it threw off
$84.2
Debt you’d be carrying
$1,184.03

10 shares is a claim on $398.94 of net worth that earned you $16.75 and generated $84.2 of cash last year, against $1,184.03 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
3% avg · 5y
FY22 5%FY23 2%FY24 2%FY25 2%FY26 1%

It earned an average 3% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−11% shares · 5y

Share count is down 11% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$156.5M
DCF · Growth Exit 5Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$156.5M
Earnings Power Value
$34.03
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$484.8M
  • growthAssumed0.0%
Graham Number
$38.83
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2022-02-28 · accession 0001170010-24-000034 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2023-02-28 · accession 0001170010-25-000024 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2024-02-29 · accession 0001170010-26-000021 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2022-02-28 · accession 0001170010-24-000034 (NetIncomeLoss)
  5. 10-K · period ending 2023-02-28 · accession 0001170010-25-000024 (NetIncomeLoss)
  6. 10-K · period ending 2024-02-29 · accession 0001170010-26-000021 (NetIncomeLoss)
  7. 10-K · period ending 2022-02-28 · accession 0001170010-24-000034 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-02-28 · accession 0001170010-25-000024 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2024-02-29 · accession 0001170010-26-000021 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-02-28 · accession 0001170010-24-000034 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2023-02-28 · accession 0001170010-25-000024 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2024-02-29 · accession 0001170010-26-000021 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-02-28 · accession 0001170010-23-000010 (LongTermDebtCurrent)
  14. 10-K · period ending 2023-02-28 · accession 0001170010-24-000034 (LongTermDebtCurrent)
  15. 10-K · period ending 2024-02-29 · accession 0001170010-25-000024 (LongTermDebtCurrent)
  16. 10-K · period ending 2025-02-28 · accession 0001170010-26-000021 (LongTermDebtCurrent)
  17. 10-K · period ending 2022-02-28 · accession 0001170010-24-000034 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-02-28 · accession 0001170010-25-000024 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-02-29 · accession 0001170010-26-000021 (CashAndCashEquivalentsAtCarryingValue)