Cash generation efficiency is concerning, as evidenced by an operating cash flow to net income ratio of just 0.09 in 2027Q1 and a massive $687.3M free cash flow outflow in 2026Q4.
| Metric | TTM | Feb'26 | Feb'25 | Feb'24 | Feb'23 | Feb'22 | Feb'21 | Feb'20 | Feb'19 | Feb'18 | Feb'17 | Feb'16 | Feb'15 | Feb'14 | Feb'13 | Feb'12 | Feb'11 | Feb'10 | Apr'09 | Feb'08 | Feb'07 | Feb'06 | Feb'05 | Feb'04 | Feb'03 | Feb'02 | Feb'01 | Feb'00 | Feb'99 | Feb'98 | Feb'97 |
|---|
| Cash from Operations | 1.5B | 1.78B | 624.44M | 458.62M | 1.28B | -2.55B | 667.76M | -236.61M | 162.97M | -80.55M | -468.14M | -148.89M | -968.13M | -613.16M | -778.44M | -62.16M | -17.2M | 50.29M | 264.59M | 79.52M | 136.8M | 122.3M | 44.74M | 148.46M | 71.97M | 42.64M | 17.81M | -25.09M | -82M | -86.1M | -25.4M |
| Operating CF Margin % | - | 6.89% | 2.37% | 1.73% | 4.32% | -7.99% | 3.52% | -1.16% | 0.9% | -0.47% | -2.95% | -0.98% | -6.78% | -4.88% | -7.1% | -0.62% | -0.19% | 0.67% | 3.79% | 0.97% | 1.83% | 1.95% | 0.85% | 3.23% | 1.81% | 1.21% | 0.65% | -1.25% | -5.59% | -9.85% | -4.98% |
| Operating CF Growth % | 4920.13% | 185.67% | 36.16% | -64.26% | 150.34% | -481.79% | 382.22% | -245.18% | 302.32% | 82.79% | -214.41% | 84.62% | -57.89% | 21.23% | -1152.24% | -261.46% | -134.2% | -80.99% | 232.74% | -41.87% | 11.86% | 173.37% | -69.87% | 106.29% | 68.77% | 139.48% | 170.96% | 69.4% | 4.76% | -238.98% | - |
| Net Income | 222.54M | 247.29M | 500.56M | 479.2M | 484.76M | 1.15B | 746.92M | 888.43M | 842.41M | 664.11M | 626.97M | 623.43M | 597.36M | 492.59M | 434.28M | 413.8M | 380.88M | 281.67M | 59.21M | 182.03M | 198.6M | 148.06M | 112.93M | 116.45M | 94.8M | 90.8M | 45.56M | 1.12M | -23.5M | -34.2M | -9.3M |
| Depreciation & Amortization | 359.07M | 345.96M | 294.8M | 260.41M | 265.22M | 273.19M | 242.16M | 215.81M | 182.25M | 179.94M | 168.88M | 137.36M | 115.17M | 101.91M | 95.28M | 82.81M | 59.42M | 58.33M | 54.74M | 46.62M | 34.55M | 26.75M | 20.25M | 16.3M | 14.95M | 16.34M | 18.12M | 15.24M | 10M | 4.6M | 1.7M |
| Stock-Based Compensation | 93.98M | 99.02M | 137.25M | 119.72M | 85.59M | 109.2M | 121.9M | 108.86M | 75.01M | 61.88M | 91.59M | 51.08M | 81.88M | 66.48M | 62.11M | 48.09M | 43.61M | 37.86M | 35.44M | 33.47M | 31.83M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 70.03M | 73.8M | -23.72M | -4.8M | -6.55M | 15M | -35.79M | -1.1M | 2.3M | 81.01M | 2.32M | 17.24M | -4.3M | -17.18M | 3.86M | -872K | 19.39M | 29.76M | -41.5M | -24.41M | -14.17M | -11.99M | -1.18M | -1.3M | 8.88M | 3.16M | 8.76M | 1.23M | 11.3M | -1.9M | 1.7M |
| Other Non-Cash Items | 1.3B | 1.39B | 450.61M | 400.08M | 419.92M | 237.48M | 231.53M | 278.47M | 220.61M | 201.64M | 218.89M | 191.45M | 157.18M | 151.66M | 58.11M | 39.26M | 28.89M | 2.43M | 10.73M | 1.4M | 4.98M | -764K | -1.49M | -1.46M | 30K | 100K | 9.09M | 3.94M | 0 | 11.4M | -100K |
| Working Capital Changes | -540.03M | -369.69M | -735.05M | -796M | 34.38M | -4.34B | -638.96M | -1.73B | -1.16B | -1.27B | -1.58B | -1.17B | -1.92B | -1.41B | -1.43B | -645.24M | -549.39M | -362.17M | 145.97M | -159.59M | -118.98M | -39.75M | -85.78M | 18.47M | -46.7M | -67.76M | -63.72M | -46.61M | -79.8M | -66M | -19.4M |
| Change in Receivables | 418.02M | -15.72M | 32.42M | 77.63M | 262.2M | -288.19M | -43.51M | -51.24M | -6.53M | 19.07M | -20.22M | 5.52M | -57.77M | 12.04M | -5.53M | 33.16M | -40.54M | -23.56M | -2.65M | -1.81M | 5.21M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | -438.41M | -202.38M | -256.55M | 48.07M | 1.4B | -1.97B | -323.32M | -326.96M | -128.76M | -130.13M | -328.53M | 154.84M | -445.45M | -123.61M | -425.22M | -43.12M | -206.34M | -139.98M | 272.62M | -139.66M | -166.42M | -93.13M | -110.51M | 389K | -67.37M | -51.95M | -62.74M | -39.91M | -55.8M | -58.9M | -23.9M |
| Change in Payables | -281.21M | -43.78M | 71.71M | 118.51M | -197.69M | 175.11M | 106.79M | 85.44M | 86.36M | 38.29M | 61.75M | -55.19M | 51.96M | 117.41M | -575K | -616.65M | -297.1M | -190.45M | -113.45M | -56.87M | 35.76M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -498.48M | -540.04M | -461M | -467M | -425.77M | -523.75M | -128.18M | -389.36M | -308.51M | -326.79M | -465.57M | -378.8M | -360.74M | -336.68M | -255.27M | -219.4M | -72.21M | -21.32M | -155.35M | -257.02M | -187.19M | -116.09M | -141.08M | -73.84M | -80.41M | 57.55M | 3.35M | -54.9M | -40.5M | -88M | -122.1M |
| Capital Expenditures | -507.59M | -540.99M | -467.94M | -465.31M | -422.71M | -308.53M | -164.54M | -331.9M | -304.64M | -296.82M | -418.14M | -315.58M | -309.82M | -310.32M | -235.71M | -172.62M | -76.58M | -22.43M | -185.7M | -253.11M | -191.76M | -194.43M | -230.08M | -181.34M | -122.03M | -41.42M | -10.83M | -45.4M | -179.9M | -234.3M | -90.4M |
| CapEx % of Revenue | 1.93% | 2.09% | 1.78% | 1.75% | 1.42% | 0.97% | 0.87% | 1.63% | 1.68% | 1.73% | 2.63% | 2.08% | 2.17% | 2.47% | 2.15% | 1.73% | 0.85% | 0.3% | 2.66% | 3.09% | 2.57% | 3.11% | 4.37% | 3.94% | 3.07% | 1.17% | 0.39% | 2.25% | 12.27% | 26.8% | 17.72% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | -229.26M | 29.91M | 331.9M | 304.64M | 97K | 1.23M | 1.54M | 0 | 0 | 0 | 0 | -4M | 447K | 45.74M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1.32M | -34.85M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 12.44M | 7.96M | 333K | 1.35M | 5.19M | 260K | 1.85M | -331.89M | -303.94M | -23.11M | -41.44M | -52.07M | -39.16M | -21.12M | -15.99M | -43.52M | 367K | 662K | -33.06M | 1.09M | 4.57M | 78.34M | 89M | 107.49M | 41.62M | 98.97M | 15.51M | 25.34M | 139.4M | 146.3M | -31.7M |
| Cash from Financing | -1.12B | -1.34B | -453.54M | 307.79M | -710.18M | 3.1B | -424.02M | 686.98M | 186.02M | 413.45M | 934.73M | 537.48M | 728.58M | 1.13B | 1.04B | 683.1M | 112.25M | -151.29M | 18.39M | 171.01M | 48.09M | -1.57M | 63.8M | -47.59M | 39.77M | -105.7M | -22.33M | 72.3M | 113.8M | 30.1M | 315.8M |
| Debt Issued (Net) | -496.54M | -682.82M | -77.57M | 378.74M | -393.34M | 3.62B | -337.23M | 1.15B | 1.05B | 935.76M | 1.44B | 1.45B | 1.51B | 1.37B | 1.16B | 657.81M | 54.63M | -186.48M | 7.83M | 148.91M | -9.54M | -6.8M | 60.24M | -51.6M | 67.6M | -103.75M | -22.22M | 68.84M | 109.8M | 27.8M | -96.6M |
| Equity Issued (Net) | -441.05M | -634.44M | -354.71M | -49.32M | -333.93M | -496.67M | -229.94M | -443.35M | -846.6M | -506.05M | -504.47M | -936.9M | -924.33M | -313.39M | -140.01M | 15.58M | 38.28M | 31.31M | 10.16M | 14.73M | 35.41M | 6.04M | 3.56M | 4.01M | 570K | 0 | -109K | 3.46M | 4M | 2.4M | 412.3M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -28.4M | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -441.07M | -642.79M | -428.45M | -94.09M | -333.93M | -576.48M | -229.94M | -567.75M | -904.73M | -579.57M | -564.34M | -983.94M | -916.98M | -307.25M | -203.41M | 0 | 0 | 0 | 0 | 0 | 0 | -804K | 0 | 0 | 0 | 0 | -109K | 0 | 0 | 0 | 0 |
| Other Financing | -183.73M | -24M | -21.25M | -21.63M | 17.09M | -20.13M | 143.15M | -20.1M | -17.06M | -16.26M | -4.29M | 29.03M | 138.76M | 67.79M | 24.1M | 9.72M | 19.35M | 3.88M | 391K | 7.37M | 22.21M | -804K | 0 | 0 | 0 | -1.96M | -154K | 0 | 0 | -100K | 100K |
| Net Change in Cash | -117.91M | -97.46M | -290.1M | 299.41M | 147.39M | 31.67M | 115.56M | 61.01M | 40.48M | 6.11M | 1.02M | 9.79M | -600.29M | 178.54M | 6.71M | 401.54M | 22.84M | -122.32M | 127.63M | -6.49M | -2.3M | 4.63M | -32.54M | 27.03M | 31.33M | -5.52M | -1.18M | -7.7M | 113.8M | 30.1M | 315.8M |
| Free Cash Flow | 994.3M | 1.24B | 156.5M | -6.69M | 860.62M | -2.86B | 503.22M | -568.5M | -141.66M | -377.37M | -886.28M | -464.48M | -1.28B | -923.48M | -1.01B | -234.78M | -93.78M | 23.39M | 78.89M | -173.59M | -54.96M | -72.14M | -185.34M | -32.87M | -50.06M | 1.22M | 6.97M | -70.49M | -261.9M | -320.4M | -115.8M |
| FCF Margin % | 3.77% | 4.8% | 0.59% | -0.03% | 2.9% | -8.96% | 2.66% | -2.8% | -0.78% | -2.2% | -5.58% | -3.07% | -8.96% | -7.34% | -9.25% | -2.35% | -1.04% | 0.31% | 1.13% | -2.12% | -0.74% | -1.15% | -3.52% | -0.71% | -1.26% | 0.03% | 0.25% | -3.5% | -17.86% | -36.65% | -22.7% |
| FCF Growth % | 83.82% | 694.16% | 2439.31% | -100.78% | 130.11% | -667.93% | 188.52% | -301.3% | 62.46% | 57.42% | -90.81% | 63.65% | -38.38% | 8.94% | -331.96% | -150.36% | -501% | -70.36% | 145.45% | -215.84% | 23.81% | 61.08% | -463.8% | 34.34% | -4190.28% | -82.44% | 109.89% | 73.09% | 18.26% | -176.68% | - |
| FCF per Share | 6.99 | 8.42 | 1.00 | -0.04 | 5.39 | -17.30 | 3.05 | -3.41 | -0.81 | -2.05 | -4.61 | -2.26 | -5.84 | -4.06 | -4.37 | -1.02 | -0.41 | 0.11 | 0.36 | -0.79 | -0.25 | -0.34 | -0.88 | -0.16 | -0.24 | 0.01 | 0.13 | -1.37 | -5.61 | -7.21 | -2.65 |
| FCF Conversion (FCF/Net Income) | 4.47x | 7.21x | 1.25x | 0.96x | 2.65x | -2.21x | 0.89x | -0.27x | 0.19x | -0.12x | -0.75x | -0.24x | -1.62x | -1.24x | -1.79x | -0.15x | -0.05x | 0.18x | 4.47x | 0.44x | 0.69x | 0.83x | 0.40x | 1.27x | 0.76x | 0.47x | 0.39x | -22.44x | 3.49x | 2.52x | 2.73x |
| Interest Paid | 0 | 0 | 104.93M | 123.55M | 122.15M | 91.69M | 86.44M | 0 | 74.2M | 69.43M | 55.14M | 34.32M | 24.18M | 30.99M | 32.6M | 33.74M | 35.35M | 4.8M | 10.17M | 9.77M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 69.6M | 164.61M | 152.63M | 373.23M | 247.75M | 0 | 220.67M | 353.98M | 371.23M | 319.98M | 346.87M | 287M | 244.34M | 223.81M | 242.51M | 163.32M | 64.02M | 124.87M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Working capital volatility
As reported in recent financial statements, KMX's operating cash flow to net income ratio has fluctuated wildly, reaching a low of 0.09 in 2027Q1, which suggests that reported earnings are frequently decoupled from the actual cash generation capabilities of the core retail and finance operations.
The extreme variance in the OCF/NI ratio indicates that accounting accruals and provisions for loan losses within the finance segment are creating significant noise in the bottom line. Investors should monitor this divergence, as it implies that net income may be an unreliable proxy for the company's true ability to fund operations internally.
Based on KMX's reported figures, free cash flow has demonstrated extreme volatility, swinging from a $1.1B inflow in 2026Q3 to a $687.3M outflow in 2026Q4, highlighting the company's inability to maintain consistent cash generation across different stages of the automotive retail cycle.
The negative FCF margins observed in multiple periods suggest that the business model is highly sensitive to inventory investment requirements. This inconsistency warrants further investigation into whether the company can achieve sustainable cash flow without relying on favorable credit market conditions for its securitization activities.
According to recent SEC filings, working capital changes have been a major drag on liquidity, with a significant $659.0M outflow in 2026Q4, indicating that the company's inventory management and collection cycles are currently failing to provide a reliable buffer against retail demand fluctuations.
The recurring negative working capital swings suggest that the company is forced to tie up substantial cash to maintain its inventory levels, even when sales velocity slows. This dynamic appears to exacerbate the company's liquidity risk during periods of market cooling, as cash is trapped in depreciating vehicle assets.
As evidenced by historical cash flow data, KMX has continued to prioritize share repurchases, such as the $204.0M outflow in 2026Q1, despite periods of negative free cash flow, which suggests a capital allocation strategy that may be disconnected from the company's immediate operational cash reality.
The decision to return capital to shareholders while operating cash flow is inconsistent appears to prioritize financial engineering over balance sheet preservation. Investors should monitor whether this deployment strategy remains sustainable if the current margin compression persists and requires additional internal funding to support the loan portfolio.
Quick answers to the most common questions about buying KMX stock.
CarMax, Inc. (KMX) generated $1.78B in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
CarMax, Inc. (KMX) generated $1.24B in free cash flow in 2026. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
CarMax, Inc. (KMX) spent $541.0M on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2026, CarMax, Inc. (KMX) spent $642.8M on share repurchases. This shows the company's commitment to returning capital to its equity investors.