Carvana (NYSE:CVNA) Trading 7.8% Higher - Still a Buy?

Key Points

• Carvana shares rose 7.8% on Tuesday, trading as high as $69.53 after closing at $64.99, with volume below average.
• Several analysts remain positive on the stock, including Jefferies lowering its target to $90 while keeping a buy rating; the consensus rating is Moderate Buy with an average target price of $92.92.
• Recent fundamentals were strong, as Carvana beat quarterly EPS and revenue estimates, though insiders have been selling shares and the stock still carries a high valuation with a beta of 3.46.

Shares of Carvana Co. (NYSE:CVNA - Get Free Report) shot up 7.8% during trading on Tuesday . The company traded as high as $69.53 and last traded at $70.0820. Approximately 5,102,436 shares traded hands during mid-day trading, a decline of 67% from the average session volume of 15,369,698 shares. The stock had previously closed at $64.99.

Analysts Set New Price Targets

A number of brokerages have recently issued reports on CVNA. Jefferies Financial Group dropped their target price on Carvana from $95.00 to $90.00 and set a "buy" rating on the stock in a research report on Tuesday. Citigroup reaffirmed an "outperform" rating on shares of Carvana in a research report on Friday, May 1st. Stephens raised their price target on shares of Carvana from $86.00 to $97.00 in a research report on Thursday, April 30th. BNP Paribas Exane lifted their price target on shares of Carvana from $77.60 to $85.80 in a research note on Thursday, April 30th. Finally, Gordon Haskett increased their price objective on shares of Carvana from $67.00 to $85.00 and gave the company a "hold" rating in a research note on Thursday, April 30th. Two research analysts have rated the stock with a Strong Buy rating, seventeen have given a Buy rating and five have given a Hold rating to the stock. According to MarketBeat, Carvana presently has a consensus rating of "Moderate Buy" and an average target price of $92.92.

Carvana Price Performance

The company has a quick ratio of 2.57, a current ratio of 4.09 and a debt-to-equity ratio of 1.05. The company has a 50 day simple moving average of $68.49 and a 200-day simple moving average of $72.80. The stock has a market cap of $77.99 billion, a price-to-earnings ratio of 42.97, a PEG ratio of 11.11 and a beta of 3.46.

Carvana (NYSE:CVNA - Get Free Report) last issued its earnings results on Wednesday, April 29th. The company reported $1.69 EPS for the quarter, topping the consensus estimate of $0.32 by $1.37. The company had revenue of $6.43 billion during the quarter, compared to analyst estimates of $6.12 billion. Carvana had a return on equity of 41.46% and a net margin of 6.40%. As a group, research analysts anticipate that Carvana Co. will post 1.58 EPS for the current fiscal year.

Insider Activity

In other Carvana news, COO Benjamin E. Huston sold 50,000 shares of the stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $68.55, for a total transaction of $3,427,500.00. Following the sale, the chief operating officer directly owned 458,755 shares of the company's stock, valued at approximately $31,447,655.25. This represents a 9.83% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Mark W. Jenkins sold 63,750 shares of the stock in a transaction on Wednesday, July 1st. The stock was sold at an average price of $68.34, for a total transaction of $4,356,675.00. Following the sale, the chief financial officer directly owned 1,029,580 shares in the company, valued at $70,361,497.20. This trade represents a 5.83% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 396,962 shares of company stock valued at $28,525,088 over the last quarter. 15.19% of the stock is owned by company insiders.

Hedge Funds Weigh In On Carvana

Large investors have recently bought and sold shares of the business. Vanguard Group Inc. increased its position in Carvana by 24.7% in the fourth quarter. Vanguard Group Inc. now owns 16,783,101 shares of the company's stock worth $7,082,804,000 after buying an additional 3,328,115 shares during the period. State Street Corp boosted its holdings in shares of Carvana by 93.7% during the fourth quarter. State Street Corp now owns 5,714,779 shares of the company's stock valued at $2,411,751,000 after acquiring an additional 2,764,759 shares during the period. Capital Research Global Investors grew its position in shares of Carvana by 42.9% during the fourth quarter. Capital Research Global Investors now owns 5,700,953 shares of the company's stock worth $2,405,959,000 after acquiring an additional 1,711,144 shares during the last quarter. Price T Rowe Associates Inc. MD grew its position in shares of Carvana by 8.6% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 17,726,838 shares of the company's stock worth $7,481,081,000 after acquiring an additional 1,407,762 shares during the last quarter. Finally, Geode Capital Management LLC increased its holdings in shares of Carvana by 55.4% in the 4th quarter. Geode Capital Management LLC now owns 3,880,711 shares of the company's stock worth $1,632,763,000 after acquiring an additional 1,382,852 shares during the period. Institutional investors own 56.71% of the company's stock.

Carvana Company Profile

Carvana Co is an online-only retailer of used vehicles that operates a consumer-facing e-commerce platform for buying and selling cars. The company markets and sells inspected, reconditioned pre-owned vehicles through its website, where shoppers can browse inventory, view detailed 360-degree photos and vehicle history reports, finance purchases, and arrange delivery or pickup. Carvana's model is built around a digital end-to-end car buying experience that aims to simplify vehicle transactions compared with traditional dealerships.

Its products and services include direct retail sales of used cars, trade-in and purchase offers for consumer vehicles, vehicle financing and related protection products, and a seven-day return policy that allows customers to test a vehicle in everyday use.

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