Carvana Co (CVNA) AI Stock Analysis

• Market Cap: $70.35B
• Dividend Yield: N/A
• Average Volume (3M): 2.81M
• Price to Earnings (P/E): 85.6
• Beta (1Y): 2.52
• 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: 3,117,149
• 30 Day Avg. Volume: 2,810,257
• 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: 0.75
• Enterprise Value/Revenue: 3.23
• Enterprise Value/Gross Profit: 15.43
• Enterprise Value/Ebitda: 28.21
• 1Y Price Target: $441.56
• Price Target Upside: 25.73% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20

• Rating: 74 Outperform
• Price Target: $393.00 ▲(11.90% Upside)

Carvana's overall stock score is driven by strong financial performance and impressive earnings call results, highlighting significant growth and profitability improvements. However, the high valuation and mixed technical indicators suggest caution. The company's strategic focus on retail growth and operational efficiency supports a positive outlook, but balance sheet stability remains a concern.

Positive Factors

Revenue Growth

The significant revenue growth underscores Carvana's expanding market presence and increasing consumer adoption of its online car buying platform, which is crucial for long-term success in the automotive retail sector.

Profitability Improvement

The substantial increase in net income and profitability margins reflects Carvana's effective cost management and operational efficiencies, enhancing its financial health and sustainability over the long term.

Operational Efficiency

The reduction in SG&A expenses per unit sold indicates improved operational efficiency, which can lead to better margins and profitability, supporting Carvana's competitive positioning in the market.

Negative Factors

Balance Sheet Concerns

Low equity levels indicate a reliance on debt, which can pose risks to financial stability and limit the company's ability to invest in growth opportunities, potentially impacting long-term sustainability.

Increased Advertising Expenses

Higher advertising expenses may pressure margins if not matched by proportional revenue growth, potentially affecting profitability and necessitating careful management to ensure long-term financial health.

Decreased Wholesale GPU

A decrease in wholesale gross profit per unit suggests challenges in maintaining profitability in the wholesale segment, which could impact overall financial performance if not addressed.

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: 351.20
• 50DMA: Negative
• 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 351.2 is below the 20-day moving average (MA) of 357.88, below the 50-day MA of 363.13, and above the 200-day MA of 293.92, indicating a neutral trend. The MACD of -7.50 indicates Positive momentum. The RSI at 48.59 is Neutral, neither overbought nor oversold. The STOCH value of 55.23 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
EBAY	76 Outperform	$43.58B	21.11	42.63%	1.17%	3.05%	-10.82%
CVNA	74 Outperform	$70.35B	85.64	49.91%	―	39.48%	-34.00%
AZO	68 Neutral	$64.41B	26.27	―	―	2.43%	-3.34%
ORLY	63 Neutral	$85.88B	34.06	―	―	6.19%	6.98%
CPNG	62 Neutral	$56.75B	156.90	8.55%	―	18.69%	-65.55%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
AAP	41 Neutral	$3.30B	-8.53	-24.78%	1.83%	-22.50%	-35219.23%

Carvana Co Corporate Events

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.