Carvana stock (CVNA) lifted more than 6% on Monday after Wedbush Securities told investors to stop worrying about the ugliness across the auto market. The analysts say Carvana’s core engine is still running clean, even if the rest of the industry is coughing.
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Wedbush Turns More Bullish on Carvana
Wedbush upgraded Carvana to Outperform from Neutral and raised its price target to $400, arguing the latest selloff has pushed the stock far below where fundamentals suggest it should trade. Analysts led by Scott Devitt said the backdrop looks messy, but Carvana’s own picture is far sturdier than the market assumes.
The endorsement landed at the perfect time. Carvana shares have climbed 52% this year, but the stock slumped 17% since September as investors fretted about rising auto delinquencies, bankrupt auto chains, and tightening credit conditions. The analysts said those fears are obscuring the fact that Carvana continues to run sharper operations and win market share even as its peers struggle.
Carvana Holds Its Ground as Credit Panic Swirls
A string of bankruptcies, including used-car chain Tricolor Holdings and auto-parts supplier First Brands, dragged the entire sector lower. These implosions sparked losses at regional banks and stirred fears that auto lending may be the next domino to fall. Because Carvana packages and sells loans into asset-backed securities, traders assumed the company would be swept into the same current.
Wedbush argued the reaction ignored the real data. They highlighted that rating agencies KBRA, S&P (SPGI), and Morningstar (MORN) have upgraded multiple classes of Carvana’s auto receivable notes in recent months. Delinquencies in the firm’s 2024 securitizations look healthier than older vintages, and the company has expanded lower-prime and sub-prime offerings while still delivering what the analysts called “relatively healthy credit performance.”
Carvana Gains Share as CarMax Stumbles
CarMax’s (KMX) difficult year has cleared even more runway for Carvana. The legacy chain missed earnings, issued a bleak outlook, and announced CEO Bill Nash’s pending exit. Wedbush believes that momentum has clearly flipped, saying Carvana is now pacing ahead of earlier forecasts for when it will surpass CarMax in quarterly used-unit volume.
The analysts now expect that milestone to hit six months sooner than their previous timeline. They credited operational upgrades, stronger logistics, and improved technology that are helping Carvana sell older, cheaper cars more efficiently while also widening access to non-prime financing.
Investors Debate Risk, but Analysts Say Opportunity Is Growing
Delinquency rates across the auto market remain high, up more than 50% from 2010 according to VantageScore. That alone may keep some investors sidelined. Wedbush takes the opposite view. For those who can handle volatility, they said this dip creates a buy-low setup in a name that is steadily separating itself from the pack.
If Wedbush is right, Carvana is no longer just surviving a broken market. It is exploiting it.
Is Carvana a Good Buy?
Wall Street’s stance on Carvana remains firmly supportive. The consensus rating sits at a Strong Buy, based on 19 analysts, with 16 Buy ratings, three Holds, and zero Sells issued over the past three months.
The latest 12-month forecast shows an average price target of $433.22, implying roughly 31% upside from the last close.
