Carvana Co (CVNA) AI Stock Analysis

• Market Cap: $80.66B
• Dividend Yield: N/A
• Average Volume (3M): 2.55M
• Price to Earnings (P/E): 93.0
• Beta (1Y): 2.50
• Revenue Growth: 39.48%
• EPS Growth: -34.00%
• Country: US
• Employees: 17,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 1.38
• Shares Outstanding: 138,083,500
• 10 Day Avg. Volume: 2,856,483
• 30 Day Avg. Volume: 2,549,229
• PEG Ratio: -2.03
• Price to Book (P/B): 19.75
• Price to Sales (P/S): 1.82
• P/FCF Ratio: 30.08
• Enterprise Value/Market Cap: 0.65
• Enterprise Value/Revenue: 3.23
• Enterprise Value/Gross Profit: 15.43
• Enterprise Value/Ebitda: 28.21
• 1Y Price Target: $418.89
• Price Target Upside: 12.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20

• Rating: 79 Outperform
• Price Target: $411.00 ▲(10.67% Upside)

Carvana's strong financial performance and positive earnings call sentiment are the primary drivers of the stock's score. The technical analysis supports a positive trend, although the high valuation presents a potential risk. Overall, the company's growth trajectory and operational improvements position it well for future success.

Positive Factors

Revenue Growth

The 42% revenue growth indicates strong market demand and effective sales strategies, reinforcing Carvana's competitive position in the online used car market.

Profitability Improvements

Significant profitability improvements with a $260 million increase in net income highlight effective cost management and operational efficiencies, supporting long-term financial health.

Operational Efficiency

Reduced SG&A expenses per unit sold demonstrate enhanced operational efficiency, which can lead to sustained margin improvements and competitive advantage.

Negative Factors

Balance Sheet Concerns

A low equity ratio indicates heavy reliance on debt, which could pose risks to financial stability and limit growth opportunities if not addressed.

Increased Advertising Expenses

Rising advertising costs may pressure margins if not matched by proportional revenue growth, potentially affecting long-term profitability.

Competitive Pressure

The partnership between Hertz and Amazon Autos increases competitive pressure in the online used car market, potentially impacting Carvana's market share and growth.

Carvana Co Business Overview & Revenue Model

Company Description

Carvana Co., together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. The company's platform allows customers to research and identify a vehicle; inspect it using company's 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up from their desktop or mobile devices. Carvana Co. was founded in 2012 and is headquartered in Tempe, Arizona.

How the Company Makes Money

Carvana generates revenue primarily through the sale of used vehicles. The company sources cars from various channels, including trade-ins and auctions, and then sells them at a markup to consumers. Key revenue streams include retail vehicle sales, financing services through their own financing arm, and extended vehicle service contracts. Additionally, Carvana benefits from partnerships with financial institutions that facilitate vehicle financing for customers. The company also offers vehicle auctions for wholesale buyers, further diversifying its income sources. Factors contributing to its earnings include the growing trend of online vehicle purchasing, a strong brand presence, and an expanding customer base.

Carvana Co Financial Statement Overview

Summary

Carvana Co displays strong financial recovery and growth, with significant improvements in profitability and operational efficiency. Revenue and profit margins have increased substantially, and cash flow generation is robust. However, balance sheet stability could be enhanced further by increasing equity levels.

Income Statement

Carvana Co has shown impressive revenue growth from 2024 to TTM, with a 19.03% increase, reflecting strong demand and market position. The gross profit margin improved to 21.89% in TTM, indicating better cost management. The net profit margin also improved significantly to 3.46% in TTM, showcasing enhanced profitability. EBIT and EBITDA margins have turned positive, at 9.23% and 11.39% respectively, which is a substantial improvement from previous years.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.41, reflecting a healthier capital structure. Return on Equity (ROE) for TTM is 32.54%, indicating strong profitability relative to equity. However, the equity ratio is only 18.47%, suggesting reliance on liabilities for financing. While there is progress, the balance sheet stability remains a concern with low equity levels.

Cash Flow

Carvana Co's free cash flow is robust at $615 million in TTM, with a healthy operating cash flow to net income ratio of 1.29, indicating efficient cash generation. The free cash flow growth rate has been significant, pointing to improved operational efficiency. The free cash flow to net income ratio of 1.09 further validates cash flow strength, although prior periods showed volatility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	16.27B	13.67B	10.77B	13.60B	12.81B	5.59B
Gross Profit	3.40B	2.71B	1.54B	1.00B	1.83B	721.57M
EBITDA	1.86B	1.36B	1.16B	-2.15B	-5.00M	-257.16M
Net Income	563.00M	210.00M	450.00M	-1.59B	-135.00M	-171.14M
Balance Sheet
Total Assets	9.37B	8.48B	7.07B	8.70B	7.01B	3.04B
Cash, Cash Equivalents and Short-Term Investments	2.32B	2.18B	896.00M	755.00M	403.00M	301.00M
Total Debt	6.11B	6.05B	6.71B	8.82B	5.77B	1.87B
Total Liabilities	7.25B	7.11B	7.46B	9.75B	6.49B	2.23B
Stockholders Equity	1.73B	1.26B	243.00M	-518.00M	306.00M	387.60M
Cash Flow
Free Cash Flow	615.00M	827.00M	716.00M	-1.84B	-3.15B	-968.41M
Operating Cash Flow	724.00M	918.00M	803.00M	-1.32B	-2.59B	-608.41M
Investing Cash Flow	-76.00M	-13.00M	31.00M	-2.58B	-627.00M	-345.93M
Financing Cash Flow	675.00M	261.00M	-868.00M	3.90B	3.53B	1.16B

Carvana Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 371.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 371.38 is below the 20-day moving average (MA) of 371.93, above the 50-day MA of 358.53, and above the 200-day MA of 279.95, indicating a neutral trend. The MACD of 5.96 indicates Positive momentum. The RSI at 51.83 is Neutral, neither overbought nor oversold. The STOCH value of 51.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CVNA.

Carvana Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVNA	79 Outperform	$80.66B	92.99	49.91%	―	39.48%	-34.00%
EBAY	77 Outperform	42.67B	20.63	45.99%	1.22%	3.05%	-10.82%
ORLY	70 Neutral	87.79B	37.40	-196.75%	―	5.15%	5.33%
AZO	68 Neutral	69.87B	28.55	-64.50%	―	2.43%	-3.34%
CPNG	62 Neutral	58.41B	160.37	7.79%	―	18.69%	-65.55%
AAP	54 Neutral	3.66B	-9.35	-15.47%	1.67%	-22.50%	-35219.23%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Carvana Co Corporate Events

Carvana Co Holds Annual Stockholders Meeting, Elects Directors

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.