Value Sense
KMX
CarMax, Inc. (KMX)
Last Price$76.7(1.0%)
Market Cap$12.0B
WACC
5.1%
Cost of Equity
11.2%
Cost of Debt
0.9%
Debt to Equity
147.4%
Beta
0.4
Stock quality
6/10
Good
KMX
is 46.4% overvalued
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KMX WACC

Recent WACC calculation

as of Mar 07, 2025
Cost of Equity
% share of Total Capital
11.2%
40.4%
Risk-free rate
4.3%
Beta
1.5
Equity Risk Premium
4.6%
Country risk premium
0.0%
Cost of Debt (after-tax)
% share of Total Capital
0.9%
59.6%
Average Cost of Debt
1.2%
Effective Tax Rate
24.6%
WACC
5.1%

WACC dynamics

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3M Return 32.1%
S&P Outperformance 19.1%
Next 3M Predicted Return 20.3%
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S&P Outperformance 15.4%
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KMX Cost of Equity

Recent Cost of Equity calculation

as of Mar 07, 2025
Risk-free rate
4.3%
Beta
1.5
Equity risk premium
4.6%
Country risk premium
0.0%
Cost of Equity
11.2%

Cost of Equity dynamics

KMX vs Peer Set: Discount Rate Comparison

WACC
Cost of Equity

General

Discount rate

financials

Company name

Revenue growth

EPS growth

Net Income margin

CarMax, Inc. logo
CarMax, Inc.KMX
5.1%
(10.6%)
(0.7%)
1.8%
Median Peer Set
6.5%
6.3%
(10.6%)
2.5%
ACV Auctions Inc. logo
ACV Auctions Inc.ACVA
10.6%
32.4%
2.1%
(12.5%)
Copart, Inc. logo
Copart, Inc.CPRT
10.1%
9.5%
9.2%
32.2%
Asbury Automotive Group, Inc. logo
Asbury Automotive Group, Inc.ABG
9.7%
(4.1%)
(35.5%)
4.1%
Lithia Motors, Inc. logo
Lithia Motors, Inc.LAD
8.2%
16.6%
(16.5%)
2.2%
Rush Enterprises, Inc. logo
Rush Enterprises, Inc.RUSHA
7.0%
(1.5%)
(10.0%)
3.9%
Group 1 Automotive, Inc. logo
Group 1 Automotive, Inc.GPI
6.0%
11.5%
(12.6%)
2.5%
Penske Automotive Group, Inc. logo
Penske Automotive Group, Inc.PAG
5.9%
3.1%
(11.2%)
3.0%
AutoNation, Inc. logo
AutoNation, Inc.AN
5.1%
(0.7%)
(23.7%)
2.6%
Sonic Automotive, Inc. logo
Sonic Automotive, Inc.SAH
4.5%
(1.0%)
24.4%
1.5%
Driven Brands Holdings Inc. logo
Driven Brands Holdings Inc.DRVN
4.2%
13.3%
N/A
(32.3%)

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FAQ

What is CarMax, Inc.'s discount rate as of Mar 07, 2025?

As of Mar 07, 2025, CarMax, Inc.'s discount rate is 5.09%. This rate is determined based on the weighted average cost of capital (WACC) and the cost of equity, factoring in CarMax, Inc.'s capital structure and risk profile.

What is CarMax, Inc.'s weighted average cost of capital (WACC)?

CarMax, Inc.'s WACC as of Mar 07, 2025, is 5.09%. This value is calculated by blending the cost of debt and cost of equity, reflecting the company’s overall cost of financing its operations.

What is CarMax, Inc.'s cost of equity?

CarMax, Inc.'s cost of equity is 11.2%, as of Mar 07, 2025. This is the return that shareholders expect based on the stock's risk level and market conditions, used to calculate the discount rate for valuing future cash flows.