Why CarMax Stock Rebounded on Thursday

CarMax (KMX) jumped 13% Thursday after two analyst upgrades reversed the stock's post-earnings slide. The used-car retailer had initially sold off despite beating consensus estimates in its fiscal Q1 2027 report and posting 6% year-over-year revenue growth.

Stephens analyst Jeff Lick drove the reversal, upgrading KMX to overweight and lifting his price target to $66 from $43—a 53% increase that signals renewed confidence in the company's trajectory. Baird followed with its own target raise to $55 from $48, though the firm's rating wasn't disclosed in the report.

The double upgrade suggests analysts see value emerging after the market's knee-jerk negative reaction to the earnings print. CarMax cleared both top- and bottom-line expectations, yet investors initially focused on weaker aspects of the quarter before the Street's reassessment.