1. Hagens Berman announces a class action lawsuit against CarMax. 2. Lawsuit alleges misleading claims about growth led to stock crashes. 3. KMX stock fell 44% following earnings miss and CEO termination. 4. Investors urged to contact for potential leadership in the lawsuit. 5. Deadline for lead plaintiff in the case is January 2, 2026.
FAQ
Why Very Bearish?
The lawsuit highlights substantial misrepresentation issues, historically leading to prolonged downturns in stock value.
How important is it?
The lawsuit's allegations and impending deadline are pivotal for KMX, influencing investor sentiment significantly.
Why Short Term?
Immediate sentiment is affected as litigation approaches, but fundamental recovery may take longer.
CarMax (KMX) Investor Alert: Securities Fraud Lawsuit Filed Over Alleged Misconduct
SAN FRANCISCO, Dec. 20, 2025 (GLOBE NEWSWIRE) — The national investor rights law firm Hagens Berman has announced the approaching Lead Plaintiff Deadline for the class action lawsuit against CarMax, Inc. (NYSE: KMX), set for January 2, 2026. This lawsuit claims that CarMax, along with key executives, misrepresented the company’s financial stability and growth prospects, ultimately contributing to significant declines in its stock price. Investors who sustained substantial losses, particularly during the stock's notable drop of 44% following a disappointing earnings report in September and the unexpected CEO termination in November, are encouraged to reach out to Hagens Berman to discuss their rights.
Details of the Securities Fraud Allegations Against KMX
The lawsuit focuses on two primary undisclosed issues that allegedly inflated the stock price of CarMax (KMX) before causing drastic declines:
- Allegations of Concealment: CarMax failed to disclose that their reported growth was driven by a temporary spike in customer demand, not sustainable business practices.
- Misrepresentation of Financial Health: Executives provided misleading assurances regarding the company's financial stability and future growth potential.
- Concerns Over Auto Finance Portfolio Risks: The CarMax Auto Finance (CAF) management's optimism was overshadowed by an unexpected $142 million increase in loan loss provisions.
This lack of transparency reportedly misled investors, reflecting systemic weaknesses in CarMax's operational strategies.
Impact of Recent Financial Disclosures
The complaint asserts that the truths surrounding CarMax's business practices were revealed in two critical announcements:
- On September 25, 2025, CarMax disclosed a disappointing Q2 financial report, noting a 24% drop in net EPS alongside a surprising $142 million loan loss provision, which led to a 20% decline in its stock price.
- On November 6, 2025, the abrupt termination of CEO, along with poor Q3 guidance, triggered another substantial drop in stock value.
According to Reed Kathrein, a partner at Hagens Berman leading this investigation, “The January 2nd deadline is critical for CarMax investors seeking a leadership role in this case. This lawsuit raises serious questions about the operational truths behind the sales figures and the risk profile of the lending portfolio.”
What Affected Investors Should Do
If you purchased CarMax (KMX) securities during the class period, from June 20, 2025, to November 5, 2025, and experienced substantial financial losses, you are encouraged to contact Hagens Berman immediately.
For stock loss submission, visit the secure form linked below:
For further information regarding the CarMax case and the ongoing investigation, please visit Hagens Berman's dedicated case page: Hagens Berman KMX Case Page.
Whistleblower Information
Individuals possessing non-public information about CarMax may wish to explore the SEC Whistleblower program, which provides substantial rewards for information leading to successful recovery by the SEC. For more details, contact Reed Kathrein at 844-916-0895 or email KMX@hbsslaw.com.
About Hagens Berman
Hagens Berman is a prominent plaintiffs’ rights law firm dedicated to holding corporations accountable. The firm has successfully represented investors, whistleblowers, workers, and consumers in various cases, achieving over $2.9 billion in settlements. For more information about Hagens Berman and its achievements, visit hbsslaw.com and follow them on social media at @ClassActionLaw.
Contact Information
For inquiries, please reach out to:
Reed Kathrein
Phone: 844-916-0895
Email: KMX@hbsslaw.com