Can CarMax Get Back to $100 Post-Covid?

Can CarMax Get Back to $100 Post-Covid?

KIEV, UKRAINE - 2018/12/18: In this photo illustration, the CarMax Company logo seen displayed on a ... [+] smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)



LightRocket via Getty Images



Comparing the trend in CarMax's stock (NYSE: KMX), a used car retailer, over recent months with its trajectory during and after the Great Recession of 2008, we believe that the stock can potentially gain 6% to levels around $95, once fears surrounding the coronavirus outbreak are put to rest. In the current situation, the used-car industry is struggling due to fewer customers and declining used-car values. Given the Hertz bankruptcy, several thousand cars could be flooded into this market - which could send car prices even lower. The used car business is already depressed since the Covid-19 shut down, due to reduced prices, low demand, and increased inventory. In fact, trends may also take a long time to bounce back now that a lot of people have started to work from home.



A detailed comparison of CarMax performance vis-à-vis the S&P 500 is available in our interactive dashboard analysis, 2007-08 vs. 2020 Crisis Comparison: How Did CarMax Stock Fare Compare With S&P 500?



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