Carvana (NYSE:CVNA – Get Free Report) announced its quarterly earnings results on Wednesday. The company reported $0.39 earnings per share for the quarter, missing analysts’ consensus estimates of $0.44 by ($0.05), FiscalAI reports. Carvana had a return on equity of 36.63% and a net margin of 6.21%. The business had revenue of $8.04 billion for the quarter, compared to analysts’ expectations of $7.71 billion. During the same period last year, the company posted $1.03 earnings per share. The firm’s revenue for the quarter was up 42.4% on a year-over-year basis.
Here are the key takeaways from Carvana’s conference call:
- Record Q3 results: Retail units sold rose 39% to 217,385, revenue increased 42% to $8.04 billion, and Adjusted EBITDA reached a record $800 million.
- Carvana reported its strongest balance sheet position to date, with net debt to trailing-12-month Adjusted EBITDA at 0.8x; refinancing $1.7 billion of notes is expected to reduce annual interest expense by approximately $45 million.
- Management expects sequential increases in retail units and Adjusted EBITDA in the fourth quarter, with full-year 2026 Adjusted EBITDA toward the higher end of its previously stated $2.7 billion–$3.0 billion range.
- The company continues investing in inventory production, reconditioning capacity, advertising, and new facilities; management said inventory availability remains below desired levels and that new sites may initially carry higher costs.
- Adjusted EBITDA margin declined to 10% from 11.3%, pressured by a shift toward higher-priced vehicles, lower other gross profit per unit from customer rate concessions and higher benchmark rates, as well as elevated fuel and logistics costs.
Carvana Stock Performance
Shares of CVNA stock opened at $67.57 on Friday. Carvana has a 12-month low of $54.46 and a 12-month high of $97.38. The firm has a market capitalization of $74.36 billion, a price-to-earnings ratio of 34.16, a price-to-earnings-growth ratio of 1.75 and a beta of 3.55. The business has a 50 day simple moving average of $65.85 and a 200 day simple moving average of $69.54. The company has a debt-to-equity ratio of 0.94, a current ratio of 3.93 and a quick ratio of 2.33.
Key Carvana News
Here are the key news stories impacting Carvana this week:
- Positive Sentiment: Carvana reported record third-quarter revenue of $8.04 billion, exceeding the $7.71 billion analyst consensus, while retail units sold rose nearly 40% year over year to 217,385. The results suggest the company continues to gain share in a sluggish used-car market. Carvana Profit Soars as Vehicle Sales Climb Nearly 40%
- Positive Sentiment: Management highlighted positive free cash flow and a net-debt position at its strongest level in nearly five years. Longer-term plans call for 3 million annual retail units and a 12.5% operating margin, supporting the bullish growth narrative. Carvana Continues To Improve
- Positive Sentiment: Morgan Stanley reportedly named Carvana a top pick after the quarterly report, while Citizens JMP raised its price target to $85 and maintained a “market outperform” rating. Needham also retained a “buy” rating despite lowering its target to $100. Morgan Stanley Names Carvana a Top Pick
- Neutral Sentiment: Analyst opinion remains mixed: DA Davidson reaffirmed “neutral” with a $67 target, while BNP Paribas Exane cut its target to $67 and kept a neutral rating. These targets indicate limited upside based on current valuation assumptions.
- Negative Sentiment: Third-quarter EPS was $0.39, below consensus estimates ranging from $0.44 to $0.47. Lower gross profit per unit and margin pressure are fueling concerns that rapid sales growth may not translate proportionally into earnings. Carvana Misses Q3 Earnings Estimates
Analysts Set New Price Targets
Several equities research analysts have recently weighed in on CVNA shares. Weiss Ratings downgraded Carvana from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Tuesday, September 22nd. BTIG Research set a $82.00 price target on shares of Carvana and gave the stock a “buy” rating in a research report on Thursday. Needham & Company LLC decreased their price target on Carvana from $120.00 to $100.00 and set a “buy” rating for the company in a research note on Thursday. Barclays reiterated an “overweight” rating and issued a $80.00 target price (down from $93.00) on shares of Carvana in a research report on Tuesday, October 6th. Finally, Wells Fargo & Company restated an “overweight” rating and set a $75.00 price objective (down from $80.00) on shares of Carvana in a research note on Friday, October 23rd. One analyst has rated the stock with a Strong Buy rating, sixteen have issued a Buy rating and eight have given a Hold rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $82.00.
View Our Latest Analysis on CVNA
Insider Activity
In other news, COO Benjamin Huston sold 50,000 shares of the business’s stock in a transaction on Tuesday, September 1st. The stock was sold at an average price of $71.55, for a total value of $3,577,500.00. Following the sale, the chief operating officer owned 478,693 shares of the company’s stock, valued at approximately $34,250,484.15. The trade was a 9.46% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Stephen R. Palmer sold 5,000 shares of the stock in a transaction on Thursday, October 1st. The shares were sold at an average price of $61.64, for a total value of $308,200.00. Following the completion of the transaction, the vice president owned 120,865 shares of the company’s stock, valued at $7,450,118.60. This trade represents a 3.97% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 358,161 shares of company stock worth $24,164,285 over the last ninety days. 15.19% of the stock is currently owned by company insiders.
About Carvana
Carvana Co (NYSE: CVNA) is an online automotive retailer that sells used vehicles through its digital platform. Customers can browse vehicles, review detailed descriptions and vehicle history information, arrange financing, complete transactions online and choose home delivery or pickup at a Carvana location.
The company also provides vehicle trade-in services and offers related products, including vehicle protection plans and other automotive services. Carvana is known for its automated, glass-enclosed vehicle vending machines, which provide an alternative pickup experience in select markets.
Founded in 2012 and headquartered in Tempe, Arizona, Carvana began operations as an online used-car retailer in 2013 and went public in 2017.
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