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Carvana Co (CVNA)
NYSE:CVNA
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Carvana Co
(NYSE:CVNA)
Rating:70Outperform
Price Target:
$336.00
▲( 15.03% Upside)
Positive Factors
Financial Performance
Carvana reported revenue and EBITDA above expectations, with units sold also exceeding forecasts.
Market Performance
Carvana's share price has increased nearly ~15%.
Market Share Growth
Analysts have raised the price objective for Carvana to $325 due to confidence in production ramp and positive market share disclosures.
Negative Factors
Market Concerns
Quarter-to-quarter volatility in Gain on Loan Sale driven by macro factors and timing of loan sales concerns investors.
Operational Challenges
Labor supply is likely the biggest bottleneck in Carvana's production ramp up.
Tariff Risks
Tariffs on auto parts could pose a near-term risk for retail gross profit per unit.
Carvana Co (CVNA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$65.36B
Dividend YieldN/A
Average Volume (3M)4.69M
Price to Earnings (P/E)105.8
Beta (1Y)3.25
Revenue Growth32.23%
EPS Growth-46.86%
CountryUS
Employees17,400
SectorConsumer Cyclical
Sector Strength74
IndustrySpecialty Retail
Share Statistics
EPS (TTM)1.59
Shares Outstanding135,023,440
10 Day Avg. Volume5,354,735
30 Day Avg. Volume4,685,733
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)27.70
Price to Sales (P/S)0.00
P/FCF Ratio69.21
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue1.25
Enterprise Value/Gross Profit22.05
Enterprise Value/Ebitda11.31
Forecast
1Y Price Target
$305.36Price Target Upside4.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
Carvana Co Business Overview & Revenue Model
Company DescriptionCarvana Co (CVNA) is an e-commerce platform for buying and selling used cars in the United States. Founded in 2012 and headquartered in Tempe, Arizona, Carvana operates in the automotive retail industry and offers a fully digital car buying experience. The company enables customers to browse, finance, purchase, and arrange for the delivery or pick-up of vehicles online, providing a vast selection of vehicles through its online platform and vending machine-style car pick-up locations.
How the Company Makes MoneyCarvana makes money primarily through the sale of used vehicles, which constitutes the core of its revenue model. The company purchases used cars from auctions, customers, and other sources, reconditions them at its inspection centers, and then sells them online at a markup. In addition to vehicle sales, Carvana generates revenue through associated financing and warranty services, offering customers auto loans and extended service contracts. The company's partnerships with financial institutions and warranty providers enable these additional revenue streams. Carvana also benefits from its vertically integrated model, which includes its own logistics network to manage vehicle transportation and delivery, further enhancing operational efficiencies and profitability.
Carvana Co Financial Statement Overview
Summary
Carvana Co's financial performance in 2024 shows significant improvements in revenue, profitability, and cash flow metrics. Revenue growth is robust at 27.0%, and profitability metrics, such as gross profit margin and net profit margin, have improved markedly. The balance sheet reflects moderate leverage and a positive return on equity, though there is a potential risk due to a lower equity base. Strong cash flow generation further underscores the company's improved liquidity.Income Statement
Carvana Co has shown strong revenue growth with a notable increase from $10.77 billion in 2023 to $13.67 billion in 2024, reflecting a robust revenue growth rate of approximately 27.0%. Gross Profit Margin improved significantly to 21.0% in 2024, compared to previous years, indicating enhanced efficiency in cost management. The Net Profit Margin turned positive at 1.54%, marking a significant turnaround from prior losses. Both EBIT and EBITDA margins are positive, highlighting operational improvements. However, the company has a history of fluctuating profitability, which presents a potential risk.75
Positive
Balance Sheet
The company's financial structure shows a reasonable Debt-to-Equity Ratio of 0.57, reflecting moderate leverage, which has improved from previous years. The Return on Equity (ROE) is positive at 16.67%, indicating effective utilization of equity. However, the Equity Ratio stands at 14.85%, suggesting a lower equity base relative to total assets, which may indicate potential financial vulnerability in downturns.60
Neutral
Cash Flow
Carvana has demonstrated strong cash flow management with a positive Operating Cash Flow to Net Income Ratio of 4.37, indicating efficient conversion of net income into cash. The Free Cash Flow grew from $716 million in 2023 to $827 million in 2024, showing a healthy Free Cash Flow Growth Rate of 15.5%. The Free Cash Flow to Net Income Ratio is 3.94, highlighting strong cash generation relative to net income. These metrics underscore the company's improved liquidity and operational cash generation capabilities.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 13.67B | 10.77B | 13.60B | 12.81B | 5.59B | Gross Profit |
| 2.88B | 1.72B | 1.25B | 1.93B | 793.76M | EBIT |
| 990.00M | -72.00M | -1.56B | -110.00M | -330.95M | EBITDA |
| 1.36B | 1.16B | -2.15B | -5.00M | -257.16M | Net Income Common Stockholders |
| 210.00M | 450.00M | -2.89B | -287.00M | -462.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.18B | 896.00M | 434.00M | 403.00M | 300.81M | Total Assets |
| 8.48B | 7.07B | 8.70B | 7.01B | 3.03B | Total Debt |
| 6.05B | 6.71B | 8.82B | 5.77B | 1.87B | Net Debt |
| 4.33B | 6.18B | 8.38B | 5.37B | 1.57B | Total Liabilities |
| 7.11B | 7.46B | 9.75B | 6.49B | 2.23B | Stockholders Equity |
| 1.26B | 243.00M | -518.00M | 306.00M | 387.60M |
| Cash Flow | Free Cash Flow | |||
| 827.00M | 716.00M | -1.84B | -3.15B | -968.41M | Operating Cash Flow |
| 918.00M | 803.00M | -1.32B | -2.59B | -608.41M | Investing Cash Flow |
| -13.00M | 31.00M | -2.58B | -627.00M | -345.93M | Financing Cash Flow |
| 261.00M | -868.00M | 3.90B | 3.53B | 1.16B |
Carvana Co Technical Analysis
Positive
292.09
Price Trends
226.66
Positive
227.70
Positive
211.70
Positive
Market Momentum
21.88
Negative
62.91
Neutral
74.13
Neutral
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 292.09 is above the 20-day moving average (MA) of 270.84, above the 50-day MA of 226.66, and above the 200-day MA of 211.70, indicating a bullish trend. The MACD of 21.88 indicates Negative momentum. The RSI at 62.91 is Neutral, neither overbought nor oversold. The STOCH value of 74.13 is Neutral, 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 2 New Risks
1.
We maintain a business relationship with DriveTime Automotive Inc. and other entities affiliated with our controlling stockholders for certain services and processes. Q4, 2024
2.
If our cybersecurity measures are breached or there is a disruption in our technology systems, our business, brand, operating results, and financial condition could be harmed. Q4, 2024
Carvana Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $79.00B | 33.59 | -174.09% | ― | 4.90% | 3.28% | |
71 Outperform | $17.92B | 21.20 | 19.19% | 3.15% | 1.99% | -32.18% | |
70 Outperform | $65.36B | 105.83 | 44.39% | ― | 32.23% | -46.86% | |
70 Outperform | $64.91B | 25.97 | -14.95% | ― | 4.72% | 4.69% | |
62 Neutral | $6.97B | 11.36 | 2.77% | 3.91% | 2.66% | -22.00% | |
46 Neutral | $2.06B | 59.62 | -23.45% | 2.93% | -9.34% | -852.37% | |
46 Neutral | $49.48M | ― | -54.32% | ― | -14.49% | -210.54% |
* Consumer Cyclical Sector Average
Performance Comparison
CVNA
Carvana Co
292.09
176.37
152.41%
AAP
Advance Auto Parts
31.31
-37.26
-54.34%
AZO
AutoZone
3,872.60
1,099.96
39.67%
GPC
Genuine Parts Company
125.09
-20.00
-13.78%
ORLY
O'Reilly Auto
1,370.49
379.05
38.23%
PRTS
US Auto Parts Network
0.84
-0.23
-21.50%
Carvana Co Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 12.70%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
Carvana's Q1 2025 earnings call highlighted significant growth in retail units sold and revenue, achieving record-breaking figures. The company reported strong profitability with a positive net income for the fifth consecutive quarter and an impressive adjusted EBITDA margin. However, there were some challenges, including a decrease in wholesale GPU and an increase in SG&A expenses. Overall, the positive achievements and strong financial performance outweigh the challenges.Q1-2025 Updates
Positive Updates
Record-Breaking Retail Units Sold
Retail units sold totaled 133,898 in Q1, an increase of 46%, setting a new company record.
Revenue Growth
Revenue was $4.232 billion, an increase of 38%, marking a new company record.
Positive Net Income and Strong Profitability
For the fifth consecutive quarter, Carvana earned positive net income and set new records for adjusted EBITDA and GAAP operating income.
Adjusted EBITDA Margin
Adjusted EBITDA was $488 million in Q1 with an adjusted EBITDA margin of 11.5%, a 3.8 percentage point increase, well within the long-term financial model range of 8% to 13.5%.
Negative Updates
Decrease in Non-GAAP Wholesale GPU
Non-GAAP wholesale GPU was $964, a decrease of $189, primarily driven by faster growth in retail units than wholesale vehicle and marketplace units and higher wholesale vehicle depreciation rates.
Increase in Non-GAAP SG&A Expense
Non-GAAP SG&A expense was $468 million, an increase of 20%.
Company Guidance
During Carvana's First Quarter 2025 Earnings Conference Call, significant metrics and future guidance were shared. Carvana reported a record adjusted EBITDA margin of 11.5%, well within their long-term target range of 8% to 13.5%, despite a seasonally weaker quarter. Retail units sold reached 133,898, marking a 46% year-over-year increase, with revenue climbing 38% to $4.232 billion. The company highlighted continuous improvements in operating efficiencies and customer offerings, contributing to positive net income for the fifth consecutive quarter. Looking ahead, Carvana aims to grow to 3 million annual retail sales with a 13.5% adjusted EBITDA margin over the next 5 to 10 years, prioritizing growth over margin while maintaining exceptional customer experiences and operational efficiency. Additionally, the company expects sequential increases in both retail units sold and adjusted EBITDA in Q2, reinforcing their focus on significant profitable growth in FY 2025.Carvana Co Corporate Events
Executive/Board ChangesShareholder Meetings
Carvana Co Holds Annual Stockholders Meeting, Elects Directors
Neutral
May 6, 2025
On May 5, 2025, Carvana Co. held its annual meeting of stockholders where several key proposals were voted on. The election of directors resulted in Dan Quayle and Gregory Sullivan being elected as Class II directors for a three-year term. Stockholders approved the compensation of the company’s named executive officers and decided to hold annual ‘say-on-pay’ votes. An amendment to the company’s certificate of incorporation for officer exculpation was approved, and Grant Thornton LLP was ratified as the independent auditor for 2025. However, a stockholder proposal for simple majority voting was not approved.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.