tiprankstipranks
Trending News
More News >
Carvana Co (CVNA)
NYSE:CVNA
Advertisement

Carvana Co (CVNA) AI Stock Analysis

Compare
4,318 Followers

Top Page

CVNA

Carvana Co

(NYSE:CVNA)

Rating:79Outperform
Price Target:
$411.00
▲(11.03% 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
Credit Rating
S&P upgraded Carvana to BB- with a Positive Outlook, citing consistent topline growth and sustained improvements in both margins and credit metrics.
Market Positioning
Carvana is seen as a tech disruptor in a highly fragmented market, which could lead to significant competitive advantages.
Operational Efficiency
Carvana's vertically-integrated national-scale sourcing, reconditioning and logistics processes are being recognized for their efficiency.
Negative Factors
Financing Concerns
Concern exists around reliance on ALLY Financial and ABS markets to sell finance receivables.
Market Volatility
Sensitivity of gain on sale to broader market volatility and investor appetite for risk is a significant topic of conversation.
Profitability Challenges
Hertz units are also lower gross profit per unit (GPU) and lower EBITDA per Unit than typical customer-sourced units for Carvana.

Carvana Co (CVNA) vs. SPDR S&P 500 ETF (SPY)

Carvana Co Business Overview & Revenue Model

Company DescriptionCarvana Co (CVNA) is an online platform for buying and selling used cars, revolutionizing the traditional car dealership model. The company operates in the automotive sector, leveraging technology to provide a seamless car buying experience through its website and mobile app. Carvana's core services include a vast inventory of vehicles, home delivery options, and a unique car vending machine feature, allowing customers to pick up their purchases in an innovative way.
How the Company Makes MoneyCarvana 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 Key Performance Indicators (KPIs)

Any
Any
Retail Units Sold
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.
Chart InsightsCarvana's retail units sold have rebounded strongly, reaching a record 133,898 in Q1 2025, marking a 46% year-over-year increase. This growth is driven by enhanced operational efficiencies and customer offerings, leading to positive net income for the fifth consecutive quarter. Despite challenges like increased SG&A expenses, the company is focused on expanding to 3 million annual retail sales over the next decade while maintaining strong profitability. The latest earnings call underscores Carvana's commitment to growth and operational excellence, positioning it well for continued success.
Data provided by:Main Street Data

Carvana Co Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
Carvana demonstrated strong revenue growth and profitability, setting multiple company records. The company continues to expand its inventory and improve operational efficiencies, although there is an increase in advertising expenses and a decrease in wholesale GPU. Overall, the positive aspects significantly outweigh the negatives, indicating a strong financial position and growth trajectory.
Q2-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Carvana reported a revenue of $4.84 billion, a 42% increase, and achieved a new company record for retail units sold with 143,280 in Q2, marking a 41% growth year-over-year.
Profitability Milestones
Carvana set new records for adjusted EBITDA, adjusted EBITDA margin, GAAP operating income, and GAAP operating margin. Net income was $308 million, a $260 million increase, with a net income margin of 6.4%.
Improved Operating Efficiencies
The company reported a $460 reduction in non-GAAP SG&A expense per retail unit sold due to operational efficiency initiatives, with a $147 decrease in Carvana operations and a $328 decrease in overhead expenses.
Expanding Inventory and Selection
Carvana increased its inventory selection by 50%, enhancing customer choices and supporting future growth.
Negative Updates
Decreased Wholesale GPU
Non-GAAP wholesale GPU decreased by $85 due to faster growth in retail units sold compared to wholesale marketplace units.
Increased Advertising Expenses
Advertising expenses increased by $29 million or $44 per retail unit sold, with a sequential increase of $12 million, indicating higher investment in marketing.
Company Guidance
In the Carvana Second Quarter 2025 Earnings Conference Call, the company provided several key metrics highlighting its impressive performance and growth. The company reported a 41% year-over-year increase in retail units sold, totaling 143,280 units, and a 42% increase in revenue, reaching $4.84 billion, both of which are new company records. Carvana achieved an adjusted EBITDA margin improvement of 200 basis points year-over-year, with adjusted EBITDA reaching $601 million, a record for the company. The GAAP operating income was noted at $511 million, resulting in a 10.6% operating margin, setting another company record. Additionally, Carvana’s net income rose to $308 million, a $260 million increase from the previous year, leading to a net income margin of 6.4%. The company also mentioned a strategic focus on increasing advertising spend in the third quarter and projected a sequential increase in retail units sold, with an adjusted EBITDA for the full year 2025 estimated between $2.0 billion and $2.2 billion. Carvana aims to continue its growth trajectory, targeting 3 million cars sold per year and a 13.5% adjusted EBITDA margin in the next 5 to 10 years.

Carvana Co Financial Statement Overview

Summary
Carvana Co displays strong financial recovery with substantial improvements in revenue growth, profit margins, and cash flow generation. However, balance sheet stability is a concern due to low equity levels.
Income Statement
85
Very Positive
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
70
Positive
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
78
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue16.27B13.67B10.77B13.60B12.81B5.59B
Gross Profit3.40B2.71B1.54B1.00B1.83B721.57M
EBITDA1.86B1.36B1.16B-2.15B-5.00M-257.16M
Net Income563.00M210.00M450.00M-1.59B-135.00M-171.14M
Balance Sheet
Total Assets9.37B8.48B7.07B8.70B7.01B3.04B
Cash, Cash Equivalents and Short-Term Investments2.32B2.18B896.00M755.00M403.00M301.00M
Total Debt6.11B6.05B6.71B8.82B5.77B1.87B
Total Liabilities7.25B7.11B7.46B9.75B6.49B2.23B
Stockholders Equity1.73B1.26B243.00M-518.00M306.00M387.60M
Cash Flow
Free Cash Flow615.00M827.00M716.00M-1.84B-3.15B-968.41M
Operating Cash Flow724.00M918.00M803.00M-1.32B-2.59B-608.41M
Investing Cash Flow-76.00M-13.00M31.00M-2.58B-627.00M-345.93M
Financing Cash Flow675.00M261.00M-868.00M3.90B3.53B1.16B

Carvana Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price370.17
Price Trends
50DMA
348.72
Positive
100DMA
316.05
Positive
200DMA
270.93
Positive
Market Momentum
MACD
6.57
Negative
RSI
57.11
Neutral
STOCH
75.14
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 370.17 is above the 20-day moving average (MA) of 356.36, above the 50-day MA of 348.72, and above the 200-day MA of 270.93, indicating a bullish trend. The MACD of 6.57 indicates Negative momentum. The RSI at 57.11 is Neutral, neither overbought nor oversold. The STOCH value of 75.14 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 0 New Risks

Carvana Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$78.85B90.7249.91%39.48%-34.00%
78
Outperform
$69.92B28.35-14.95%5.15%1.99%
77
Outperform
$41.08B19.8642.63%1.23%3.05%-10.82%
70
Neutral
$87.56B37.14-174.09%5.15%5.33%
62
Neutral
$51.79B142.658.55%18.69%-65.55%
61
Neutral
$17.96B13.14-5.36%3.00%1.25%-13.95%
48
Neutral
$3.57B59.62-24.78%1.69%-22.50%-35219.23%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CVNA
Carvana Co
370.17
236.76
177.47%
AAP
Advance Auto Parts
60.06
21.25
54.75%
AZO
AutoZone
4,232.96
1,140.40
36.88%
EBAY
eBay
93.03
34.76
59.65%
ORLY
O'Reilly Auto
105.04
30.43
40.79%
CPNG
Coupang
28.73
6.73
30.59%

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
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.Date of analysis: Aug 19, 2025