CarMax, Inc.
Thesis
CarMax has a unique business model for selling used cars that has proven difficult for competitors to replicate. The company is only halfway built out across the U.S., presenting a significant opportunity for growth by potentially doubling its store base. When purchased, CarMax was trading at 15 times earnings, below the market average of 17-18 times, while also showing healthy same-store sales growth.
Did it work?
The long thesis on CarMax has played out successfully, as evidenced by a substantial price increase of 277.8% over 127 months. The company's unique business model and growth potential have been validated, and the stock's valuation has improved relative to the market average. Additionally, the significant increase in store count and same-store sales growth supports the original thesis.
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