Used-car retailer Carvana (CVNA) scored a Buy rating from UBS, which believes that the company has a “differentiated, best-in-class online platform and customer experience” that positions it to win market share in the large but fragmented used-vehicle space. The company recently reported better-than-expected Q3 revenue. However, shares fell following the Q3 top-line beat due to the contraction in the adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin.
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UBS Analyst Is Bullish on CVNA Stock
UBS analyst Joseph Spak assigned a price target of $450 to Carvana stock, implying 20% upside potential. According to UBS estimates, Carvana currently accounts for only 1.5% of the used-vehicle sales market (about 3% of the used retail market). Spak expects the company’s market share to grow to about 4% by the end of 2030 and to nearly 8% over the next 10 years, as it progresses toward its used vehicle target of 3 million.
Spak expects Carvana’s growth to be driven by a continued shift toward online channels (currently, only 2% of used vehicles are bought online). The analyst added that UBS Evidence Lab data reinforces the view that the company’s “best-in-class” online platform differentiates it from its largest rival, thanks to a better consumer experience and generally lower prices. Spak also noted Carvana’s focus on further enhancing its consumer experience through initiatives like same/next-day delivery, which should help in increasing brand awareness.
Additionally, Spak highlighted that UBS’ 2026 and 2027 EBITDA projections are about 5% above the Street’s expectations. The analyst expects the company’s EBITDA to continue to grow at about 25% CAGR (compound annual growth rate) through the remainder of this decade, supporting CVNA stock’s premium valuation.
Is CVNA a Good Stock to Buy?
Overall, Wall Street has a Strong Buy consensus rating on Carvana stock based on 16 Buys and three Holds. The average CVNA stock price target of $432.67 indicates 15.5% upside potential. CVNA stock has rallied about 84% year-to-date.
