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Carvana (CVNA)
NYSE:CVNA
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Carvana Co
(NYSE:CVNA)
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Rating:66Neutral
Price Target:
$379.00
▼(-14.37% Downside)
Carvana's strong financial performance and positive earnings call sentiment are the primary drivers of its stock score. The technical analysis indicates bullish momentum, though caution is warranted due to overbought signals. High valuation metrics suggest potential overvaluation, which is a risk factor. Overall, Carvana is on a positive trajectory but must address cash flow challenges and valuation concerns to sustain growth.
Positive Factors
Revenue Growth
Carvana's significant revenue growth highlights its expanding market presence and successful business model, indicating strong future potential.
Operational Efficiency
Improved operational efficiency reduces costs and enhances profitability, supporting sustainable long-term growth and competitive positioning.
S&P 500 Inclusion
Inclusion in the S&P 500 signifies recognition of Carvana's growth and stability, potentially increasing investor confidence and access to capital.
Negative Factors
Cash Flow Challenges
Declining free cash flow growth can limit Carvana's ability to invest in growth opportunities and manage financial obligations, impacting long-term sustainability.
High Return on Equity
A high return on equity may indicate aggressive leveraging, which can pose risks to financial stability if not managed carefully.
Insider Selling
Significant insider selling might signal potential concerns about future performance, affecting investor sentiment and long-term trust in management.
Carvana Co (CVNA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$96.28B
Dividend YieldN/A
Average Volume (3M)4.38M
Price to Earnings (P/E)100.8
Beta (1Y)2.48
Revenue Growth45.55%
EPS Growth5776.52%
CountryUS
Employees17,400
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)1.03
Shares Outstanding141,423,190
10 Day Avg. Volume2,017,967
30 Day Avg. Volume4,384,989
Financial Highlights & Ratios
PEG Ratio-2.03
Price to Book (P/B)19.75
Price to Sales (P/S)1.82
P/FCF Ratio30.08
Enterprise Value/Market Cap0.58
Enterprise Value/Revenue3.07
Enterprise Value/Gross Profit14.81
Enterprise Value/Ebitda28.99
Forecast
1Y Price Target
$475.88Price Target Upside7.52% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Carvana Co Business Overview & Revenue Model
Company DescriptionCarvana Co., together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. The company offers vehicle acquisition, inspection and reconditioning, online search and shopping experience, financing, complementary products, logistics network and distinctive fulfillment experience, and post-sale customer support services. It also operates auction sites. Carvana Co. was founded in 2012 and is based in Tempe, Arizona.
How the Company Makes MoneyCarvana generates revenue primarily through the sale of used vehicles, which is its main revenue stream. When a consumer purchases a car, Carvana charges a markup on the vehicle's price, which includes the cost of acquiring, reconditioning, and delivering the car. Additionally, the company earns money from fees associated with financing and vehicle trade-ins. Carvana also offers a subscription service that provides customers with a flexible vehicle usage option. Significant partnerships with financial institutions allow Carvana to offer competitive financing options, further enhancing its revenue potential. Furthermore, Carvana's innovative model reduces overhead costs associated with traditional dealerships, allowing for competitive pricing and improved margins.
Carvana Co Key Performance Indicators (KPIs)
Any
Retail Units Sold
Tracks the number of vehicles sold directly to consumers, indicating sales performance, market demand, and the company's ability to attract and retain customers.
Tracks the number of vehicles sold directly to consumers, indicating sales performance, market demand, and the company's ability to attract and retain customers.
Data provided by:
The Fly
The FlyCarvana Co Earnings Call Summary
Earnings Call Date:Oct 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 19, 2026
Earnings Call Sentiment Positive
Carvana reported strong growth and financial performance, setting new records in revenue and retail units sold. The company expanded its loan sale partnerships and made significant advancements in operational efficiency and customer experience, particularly with its digital auction and same-day delivery capabilities. However, there were some challenges such as decreased non-GAAP retail and wholesale GPU and the impact of the EV tax credit expiration. Overall, the sentiment is positive due to the company's robust growth and strategic advancements.Q3-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Carvana set new records for retail units sold, revenue, adjusted EBITDA, and GAAP operating income. Retail units sold totaled 155,941 in Q3, an increase of 44%. Revenue was $5.647 billion, an increase of 55%.
Significant Financial Milestones
For the first time, Carvana's annual revenue run rate exceeded $20 million, and the net debt to trailing 12-month adjusted EBITDA ratio is now down to just 1.5x, the company's strongest financial position ever.
Expansion of Loan Sale Partnerships
Carvana expanded existing loan sale partnerships with agreements for the sale of up to $14 billion of future loan principal, including upsizing the Ally agreement to $6 billion through October 2027.
Operational Efficiency Improvements
Carvana achieved a $319 reduction in non-GAAP SG&A expense per retail unit sold due to operational efficiency initiatives.
Digital Auction and Same-Day Delivery Innovations
Carvana developed the ADESA Clear digital auction capability and tested same-day delivery in Phoenix, achieving 40% of customers receiving same or next-day delivery.
Negative Updates
Decrease in Non-GAAP Retail GPU
Non-GAAP retail GPU decreased by $77, primarily driven by higher retail depreciation rates.
Decrease in Non-GAAP Wholesale GPU
Non-GAAP wholesale GPU decreased by $168, primarily driven by higher wholesale depreciation rates and retail units sold growth outpacing ADESA marketplace growth.
Potential Impact of EV Tax Credit Expiration
The expiration of federal tax credits for EVs has reduced EV purchases, although Carvana's system has adapted to these changes.
Company Guidance
During Carvana's Q3 2025 earnings call, the company provided optimistic guidance focused on future growth and profitability. Carvana aims to sell 3 million cars annually within the next 5 to 10 years, targeting a 13.5% adjusted EBITDA margin. The company reported record-breaking achievements for the quarter, including retail units sold at 155,941, a 44% increase year-over-year, and revenue of $5.647 billion, marking a 55% growth. Profit margins are significantly exceeding industry averages, with net income reaching $263 million and an adjusted EBITDA of $637 million. Carvana also highlighted strategic investments in logistics and technology, such as increasing reconditioning capacity and enhancing same-day delivery capabilities, which have collectively reduced delivery times by one day over the past five quarters. The company continues to leverage advertising investments to build brand awareness and reported a $319 reduction in non-GAAP SG&A expense per retail unit sold, driven by operational efficiencies. Looking forward, Carvana expects Q4 retail units sold to exceed 150,000 and adjusted EBITDA to reach the high end of the $2 billion to $2.2 billion range for the full year 2025.Carvana Co Financial Statement Overview
Summary
Carvana Co has shown strong improvements in profitability and revenue growth, with a notable increase in gross and net profit margins. However, challenges remain with cash flow management, as indicated by declining free cash flow growth. The balance sheet is more stable with reduced leverage, but high return on equity suggests potential risks.Income Statement
Carvana Co has shown a strong improvement in its income statement metrics over the TTM period. The gross profit margin increased to 20.91%, and the net profit margin improved to 3.46%, indicating enhanced profitability. Revenue growth rate of 12.24% in the TTM period is a positive sign, reflecting strong sales performance. However, the company has experienced fluctuations in EBIT and EBITDA margins in previous years, which could pose risks if not stabilized.Balance Sheet
The balance sheet shows a significant reduction in debt levels, with the debt-to-equity ratio improving from 27.60 in 2023 to 3.53 in the TTM period. This indicates better financial stability. However, the return on equity remains high at 44.11%, which may suggest aggressive leveraging strategies. The equity ratio is not explicitly calculated but appears to be improving with increased stockholders' equity.Cash Flow
Cash flow metrics indicate some challenges, with a decline in free cash flow growth by -11.22% in the TTM period. The operating cash flow to net income ratio is at 0.51, suggesting moderate cash generation relative to net income. The free cash flow to net income ratio is healthy at 0.85, but the negative growth trend in free cash flow is a concern.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 18.27B | 13.67B | 10.77B | 13.60B | 12.81B | 5.59B |
| Gross Profit | 3.78B | 2.71B | 1.72B | 1.00B | 1.83B | 721.57M |
| EBITDA | 1.93B | 1.36B | 1.16B | -2.15B | -5.00M | -257.16M |
| Net Income | 629.00M | 210.00M | 450.00M | -1.59B | -135.00M | -171.14M |
Balance Sheet | ||||||
| Total Assets | 9.85B | 8.48B | 7.07B | 8.70B | 7.01B | 3.04B |
| Cash, Cash Equivalents and Short-Term Investments | 2.71B | 2.18B | 896.00M | 755.00M | 785.00M | 432.00M |
| Total Debt | 5.75B | 6.05B | 6.71B | 8.82B | 5.77B | 1.87B |
| Total Liabilities | 6.90B | 7.11B | 7.46B | 9.75B | 6.49B | 2.23B |
| Stockholders Equity | 2.28B | 1.26B | 243.00M | -518.00M | 306.00M | 387.60M |
Cash Flow | ||||||
| Free Cash Flow | 546.00M | 827.00M | 716.00M | -1.84B | -3.15B | -968.41M |
| Operating Cash Flow | 666.00M | 918.00M | 803.00M | -1.32B | -2.59B | -608.41M |
| Investing Cash Flow | -107.00M | -13.00M | 31.00M | -2.58B | -627.00M | -345.93M |
| Financing Cash Flow | 730.00M | 261.00M | -868.00M | 3.90B | 3.53B | 1.16B |
Carvana Co Technical Analysis
Positive
442.58
Price Trends
384.24
Positive
373.73
Positive
334.42
Positive
Market Momentum
11.74
Positive
56.73
Neutral
86.84
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVNA, the sentiment is Positive. The current price of 442.58 is below the 20-day moving average (MA) of 443.08, above the 50-day MA of 384.24, and above the 200-day MA of 334.42, indicating a neutral trend. The MACD of 11.74 indicates Positive momentum. The RSI at 56.73 is Neutral, neither overbought nor oversold. The STOCH value of 86.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CVNA.
Carvana Co Risk Analysis
Carvana Co disclosed 41 risk factors in its most recent earnings report. Carvana Co reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Carvana Co Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Neutral | $7.75B | 12.67 | 27.16% | ― | 6.06% | -1.71% | |
66 Neutral | $96.28B | 100.82 | 43.53% | ― | 45.55% | 5776.52% | |
66 Neutral | $77.35B | 31.74 | ― | ― | 6.19% | 6.98% | |
63 Neutral | $54.91B | 23.11 | ― | ― | 3.81% | -4.26% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $6.33B | 14.76 | 7.46% | ― | 0.12% | 2.78% | |
48 Neutral | $2.54B | -6.71 | -23.85% | 2.53% | -19.41% | -957.94% |
* Consumer Cyclical Sector Average
CVNA
Carvana Co
442.58
248.07
127.54%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.