CarMax vs Penske Automotive Group
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KIRA’s take AI analyst
I put CarMax and Penske Automotive Group side by side, using each one’s latest annual report. Here is what stands out:
- Penske Automotive Group is the larger business, with $31.8B of revenue in fiscal 2025 against $25.9B for CarMax.
- Penske Automotive Group grew revenue faster (−0.2%, against −1.8%).
- CarMax turned more of its sales into free cash flow (4.8% FCF margin, against 2.1%).
- Penske Automotive Group earned a higher return on the capital invested in it (12.8%, against 1.3%).
- Investors pay more for each dollar of CarMax’s earnings: a P/E of 24.3x against 15.4x for Penske Automotive Group.
Who comes out ahead
Of the 10 measures where higher (or lower) is clearly better, how many each company leads.
CarMax
KMX
2/10
FCF marginShare count change
Penske Automotive Group
PAG
8/10
Revenue growth5-year growthGross marginNet marginReturn on capitalReturn on equityPiotroski F-scoreNet debt / EBITDA
Side by side
Best in the row
| Latest fiscal year | KMX FY26 | PAG FY25 |
|---|---|---|
| Size | ||
| Market cap | $7.3B | $14.0B |
| Revenue | $25.9B | $31.8B |
| Free cash flow | $1.2B | $651M |
| Net income | $247M | $935M |
| Growth | ||
| Revenue growth | −1.8% | −0.2% |
| 5-year growth | 6.4% | 9.2% |
| Share count change | −5.4% | −1.0% |
| Profitability | ||
| Gross margin | 10.8% | 16.4% |
| Operating margin | — | 4.0% |
| Net margin | 1.0% | 2.9% |
| FCF margin | 4.8% | 2.1% |
| Return on capital | 1.3% | 12.8% |
| Return on equity | 4.1% | 17.1% |
| Balance sheet | ||
| Net debt | $17.3B | $2.1B |
| Net debt / EBITDA | 20.6x | 1.5x |
| Dividends and buybacks | $643M | $503M |
| Valuation & quality | ||
| P/E | 24.3x | 15.4x |
| Piotroski F-score | 5 | 6 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.