CarMaxNYSE: KMX

These three stocks might be a good beginning for a long-term investment portfolio.

CarMax Inc. (NYSE: KMX) saw its shares rise by more than 15.3% in just one day after the company announced its latest quarterly earnings. Investors who are informed understand the current trends in the car market, especially the differences between used and new cars.

CarMax does not have strong competitive advantages and has not performed well in the market, with its stock prices remaining flat while the S&P 500 increased by 30% during the same time. In its Q2 results, CarMax reported mixed outcomes, with an increase in retail used unit sales but a 4.3% drop in overall revenue because of a significant fall in wholesale vehicle sales. Additionally, CarMax's margins and return on invested capital are much lower than those of its competitors, suggesting a weaker position in the market and less effective use of capital.

CarMax is adjusting to changes in the car industry by working on enhancing the customer experience to stay the top used car dealer in the country. On Thursday, the company reported a 12.7% drop in wholesale sales, which involves selling cars at auctions to other dealers.

KMX's earnings for the second quarter of the fiscal year fell short of the Zacks Consensus Estimate, but their revenues exceeded expectations.

CarMax (KMX) shares rose on Thursday after the largest used car retailer in the U.S. reported better-than-expected results due to increased retail vehicle sales.

CarMax, Inc. (NYSE:KMX) held its Q2 2025 Earnings Conference Call on September 26, 2024, at 9:00 AM ET. The call featured company representatives including David Lowenstein, Bill Nash, and Enrique Mayor-Mora, along with various participants from financial institutions. Thank you for joining us for the CarMax Earnings Release Conference Call for the second quarter of the fiscal year 2025.

While the revenue and earnings per share (EPS) for CarMax (KMX) provide insight into its performance for the quarter ending in August 2024, it could be helpful to look at how these important figures stack up against Wall Street predictions and last year's results.

On Thursday, used car retailer CarMax reported that its second-quarter profits fell short of Wall Street expectations. Although price reductions on used cars increased sales, they also led to lower profit margins.