Carvana Co (CVNA) AI Stock Analysis

• Market Cap: $67.37B
• Dividend Yield: N/A
• Average Volume (3M): 3.40M
• Price to Earnings (P/E): 66.1
• Beta (1Y): 2.53
• Revenue Growth: 45.55%
• EPS Growth: 5776.52%
• Country: US
• Employees: 17,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 1.17
• Shares Outstanding: 141,423,190
• 10 Day Avg. Volume: 4,607,239
• 30 Day Avg. Volume: 3,396,663
• 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: 0.87
• Enterprise Value/Revenue: 3.22
• Enterprise Value/Gross Profit: 15.56
• Enterprise Value/Ebitda: 30.47
• 1Y Price Target: $440.87
• Price Target Upside: 51.95% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $379.00 ▲(30.63% Upside)

Carvana's overall stock score is driven by strong earnings call performance and financial improvements, particularly in profitability and revenue growth. However, technical analysis and valuation concerns, including high P/E ratio and lack of dividend yield, weigh down the score. Addressing cash flow challenges and stabilizing technical indicators could enhance the stock's attractiveness.

Positive Factors

Revenue Growth

A 55% increase in revenue indicates strong demand and effective sales strategies, positioning Carvana for sustained growth in the online used car market.

Operational Efficiency

Enhanced operational efficiencies reduce costs, improving margins and profitability, which supports long-term financial health and competitiveness.

Inventory Expansion

Expanding inventory enhances customer satisfaction and market reach, supporting future revenue growth and competitive positioning.

Negative Factors

Cash Flow Challenges

Negative free cash flow growth can strain liquidity and limit investment in growth initiatives, posing risks to long-term financial stability.

High Return on Equity

While high ROE indicates profitability, it may also reflect high leverage, which can increase financial risk if not managed properly.

Increased Advertising Expenses

Rising advertising costs may pressure margins if not offset by proportional revenue growth, impacting long-term profitability.

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 has shown significant improvements in profitability and revenue growth, with a strong income statement performance. The balance sheet indicates improved financial stability with reduced leverage, though high return on equity suggests potential risks. Cash flow management is an area for improvement due to declining free cash flow growth.

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	1.54B	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	403.00M	301.00M
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

• Technical Analysis Sentiment: Negative
• Last Price: 290.14
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVNA, the sentiment is Negative. The current price of 290.14 is below the 20-day moving average (MA) of 334.29, below the 50-day MA of 357.81, and below the 200-day MA of 298.93, indicating a bearish trend. The MACD of -14.50 indicates Positive momentum. The RSI at 36.01 is Neutral, neither overbought nor oversold. The STOCH value of 11.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CVNA.

Carvana Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EBAY	70 Outperform	$36.62B	17.63	42.43%	1.40%	4.89%	17.30%
CPNG	66 Neutral	$58.58B	143.02	8.73%	―	16.63%	-62.54%
CVNA	64 Neutral	$67.37B	66.10	43.53%	―	45.55%	5776.52%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ORLY	60 Neutral	$79.46B	32.90	―	―	6.19%	6.98%
AZO	58 Neutral	$61.14B	25.27	―	―	2.43%	-3.34%
AAP	41 Neutral	$2.89B	―	-23.85%	1.97%	-19.41%	-957.94%

Carvana Co Corporate Events

Carvana’s Earnings Call: Record Growth and Optimistic Outlook

Carvana’s recent earnings call revealed a positive sentiment, marked by strong growth and financial performance. The company reported record-breaking revenue and retail units sold, alongside significant advancements in operational efficiency and customer experience. However, challenges such as decreased non-GAAP retail and wholesale GPU and the impact of the EV tax credit expiration were noted. Overall, the sentiment was buoyant due to the company’s robust growth and strategic progress.

Carvana’s Financial Growth and Strategic Moves in Q3 2025

Carvana Co. is a leading e-commerce platform specializing in the buying and selling of used cars, known for its innovative approach to transforming the car sales experience through a seamless online transaction process.

Carvana’s Earnings Call: Record Growth and Strategic Outlook

Carvana’s recent earnings call showcased a robust performance with record-breaking growth in retail units sold and significant improvements in revenue and profitability metrics. The company highlighted operational efficiencies and maintained a positive outlook for future growth. However, concerns were raised regarding decreased wholesale GPU and rising advertising expenses.

Carvana’s Record-Breaking Quarter Highlights Growth

Carvana is a prominent player in the automotive retail industry, known for its innovative approach to buying and selling cars online, leveraging technology to enhance customer experience and operational efficiency. In its latest earnings report, Carvana showcased impressive growth and profitability, setting new records across key financial metrics. The company sold over 143,000 retail units, marking a 41% increase year-over-year, and achieved a net income of $308 million, a substantial rise from the previous year. Revenue reached $4.840 billion, up 42%, while Adjusted EBITDA increased by 70% to $601 million. Carvana’s vertically integrated model continues to drive its success, with improvements in customer experience and operational efficiencies contributing to its strong performance. The company has expanded its inventory selection and integrated additional ADESA sites, reducing transport distances and improving delivery times. Looking ahead, Carvana remains optimistic about its growth trajectory, aiming to sell 3 million retail units annually within the next 5 to 10 years while maintaining a robust Adjusted EBITDA margin. The company’s focus on enhancing customer experience and operational efficiency positions it well for continued success in the evolving automotive retail landscape.