Street View: CarMax's Q2 profit drop signals structural challenges

** Used-car retailer CarMax KMX.N reported a fall in second-quarter profit on Thursday, as surplus inventory and fall in prices affected the profit margin

** Shares plunged 20% on Thursday

INVESTOR CONFIDENCE WAVERS

** J.P. Morgan ("neutral", PT: $50) says CarMax faces structural challenges alongside weak earnings and declining market share; says competitor Carvana CVNA.N is outperforming

** Truist Securities ("buy", PT: $47) believes sales decline may reflect on earlier demand pull forward but the growing market shares losses to CVNA is the bigger concern along with challenges in pricing and customer perception

** Needham ("buy," PT: $60) says KMX built up too much inventory, which in turn led to price cuts. Brokerage says this hit both sales volume and profit per unit, creating a negative cycle that investors have seen before

** RBC ("outperform," PT: $59) says investors are seeking clarity on whether the weak performance was company-specific or a broader economic signal