Carmax Inc (KMX) is overvalued and Lithia Motors Inc (LAD) is undervalued.
Against our estimates of intrinsic value, LAD trades at the wider discount: a margin of safety of +67%, against -111% for KMX.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 7.0% values the shares at $26.99; the price of $56.84 is 111% above that value.
Leak Score 0/100 on 3 of 12 signals
Discounting its cash flows at 6.9% (average of 2 methods) values the shares at $940.77; the price of $312.32 is 67% below that value, and 84% of that value comes from beyond year five.
Leak Score 41/100 on 3 of 12 signals
| Metric | KMX | LAD |
|---|---|---|
| Verdict | Overvalued | Undervalued |
| Price | $56.84 | $312.32 |
| Intrinsic value | $26.99 | $940.77 |
| Margin of safety | -111% | +67% |
| Leak Score | 0/100 (3/12) | 41/100 (3/12) |
| Market cap | $8.1B | $6.9B |
| Revenue growth, 5 years | 6.7% | 23.4% |
| Operating margin | 2.1% | 3.8% |
| Net margin | 0.8% | 1.9% |
| Return on equity | 3.6% | 10.7% |
| Debt to equity | 3.08 | 2.59 |
| P/E | 37.4x | 10.3x |
| Forward P/E | — | 7.3x |
| P/B | 1.3x | 1.1x |
| Dividend yield | — | 0.7% |