Valued with a market capitalization of $89.5 billion, Carvana Co. (CVNA) operates an online platform for buying and selling used cars, offering services such as vehicle acquisition, inspection and reconditioning, financing, logistics and after-sales customer service. It also operates auction sites to support its operations.
Shares of the Tempe, Arizona-based company have outperformed the broader market over the past 52 weeks. CVNA stock is up 53.8% over this period, while the broader S&P 500 index ($SPX) is up 15.6%. However, the company’s shares are down 2.4% year over year, lagging SPX’s 1.7% gain.
Taking a closer look, shares of the used car retailer have outperformed the State Street Consumer Discretionary Select Sector SPDR ETF (XLY)’s 4.1% gain over the past 52 weeks.
Despite reporting better-than-expected third-quarter 2025 revenue of $5.65 billion on Oct. 29, CVNA stock fell 13.8% the next day as earnings disappointed, with a profit of $1.03 per share missing Wall Street’s estimate and adjusted EBITDA margin falling to 11.3%. Investors were also concerned about future guidance, as management projected fourth-quarter retail unit sales just above 150,000, implying a potential 4% quarter-over-quarter decline and a sharp slowdown in year-over-year growth despite a strong 44% increase in the third quarter to 155,941 units.
For the fiscal year ending December 2025, analysts expect CVNA’s EPS to rise 389.2% year over year to $4.99. The company’s history of earnings surprises is mixed. It surpassed consensus estimates in three of the last four quarters and missed estimates on another occasion.
Among the 23 analysts covering the stock, the consensus rating is “Strong Buy.” This is based on 15 “Strong Buy” ratings, three “Moderate Buys” and five “Holds.”
This setup is more bullish than three months ago, with 12 “Strong Buy” ratings for the stock.
On January 15, UBS analyst Joseph Spak maintained a “Buy” rating on Carvana and set a price target of $545.
The average price target of $491.86 represents a 19.6% premium to CVNA’s current levels. The Street’s high price target of $600 implies a potential upside of 45.9% from current price levels.
As of the date of publication, Sohini Mondal had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com