Carvana (NYSE:CVNA) Shares Gap Up - Still a Buy?

Key Points

• Carvana shares surged after the company reported third-quarter revenue of $8.04 billion, up 42.4% year over year, with retail vehicle sales rising nearly 40% to about 217,385 units.
• The company highlighted positive free cash flow, improved net debt and approximately $289 million in net income, while reaffirming long-term goals of 3 million annual retail units and a 12.5% operating margin by 2030–2035.
• Profitability remains a concern: Adjusted EPS of $0.39 missed consensus estimates and fell from $1.03 a year earlier. Analysts remain broadly positive, with a “Moderate Buy” consensus and an average price target of $81.78, though some firms have reduced their targets.

Carvana Co. (NYSE:CVNA - Get Free Report)'s share price gapped up before the market opened on Thursday. The stock had previously closed at $59.05, but opened at $65.28. Carvana shares last traded at $68.8110, with a volume of 3,873,086 shares.

Key Headlines Impacting Carvana

Here are the key news stories impacting Carvana this week:

• Positive Sentiment: Record revenue and vehicle sales: Third-quarter revenue reached $8.04 billion, up 42.4% year over year and above the $7.71 billion analyst estimate. Retail units sold rose nearly 40% to approximately 217,385, signaling strong demand for used vehicles. Carvana Surges as Record Sales Overshadow Earnings Miss
• Positive Sentiment: Improving financial position: Management highlighted positive free cash flow and net debt at its best level in nearly five years. The company also reported quarterly net income of about $289 million, supporting the view that its turnaround and scale strategy are progressing. Carvana Continues to Improve
• Positive Sentiment: Long-term growth ambitions: Carvana reiterated targets of 3 million annual retail units and a 12.5% operating margin by 2030–2035, while emphasizing greater focus on GAAP profitability and cash generation. Carvana Q3 2026 Earnings Call Highlights
• Neutral Sentiment: Analyst remains bullish despite target cut: Needham lowered its price target from $120 to $100 but maintained a “buy” rating, leaving substantial implied upside based on the cited price. The reduction suggests expectations have become more conservative even as the analyst remains positive. Needham Analyst Ratings
• Negative Sentiment: EPS and margin pressure: Adjusted earnings were $0.39 per share, below consensus estimates ranging from $0.44 to $0.47 and down from $1.03 a year earlier. Lower gross profit per unit and reduced GPU profits remain risks to the company’s profitability narrative. Carvana Misses Q3 Earnings Estimates

Analyst Ratings Changes

A number of analysts have issued reports on the company. UBS Group reissued a "buy" rating and issued a $84.00 price target on shares of Carvana in a research note on Thursday. Citigroup reaffirmed a "market outperform" rating on shares of Carvana in a research report on Wednesday. BNP Paribas Exane dropped their price objective on shares of Carvana from $86.00 to $69.00 and set a "hold" rating on the stock in a research note on Thursday, July 30th. Royal Bank Of Canada set a $82.00 target price on Carvana and gave the stock an "outperform" rating in a research report on Thursday, July 30th. Finally, Oppenheimer set a $90.00 price objective on Carvana and gave the stock an "outperform" rating in a report on Wednesday, September 30th. One investment analyst has rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and eight have issued a Hold rating to the stock. According to data from MarketBeat.com, Carvana has an average rating of "Moderate Buy" and a consensus target price of $81.78.

Carvana Stock Performance

The stock has a market capitalization of $74.98 billion, a P/E ratio of 37.62, a P/E/G ratio of 1.71 and a beta of 3.55. The stock has a 50 day moving average of $65.89 and a 200 day moving average of $69.64. The company has a debt-to-equity ratio of 0.94, a quick ratio of 2.33 and a current ratio of 3.93.

Carvana (NYSE:CVNA - Get Free Report) last posted its earnings results on Wednesday, October 28th. The company reported $0.39 EPS for the quarter, missing the consensus estimate of $0.44 by ($0.05). Carvana had a return on equity of 37.06% and a net margin of 6.26%. The firm had revenue of $8.04 billion during the quarter, compared to the consensus estimate of $7.71 billion. During the same quarter last year, the company posted $1.03 EPS. Carvana's revenue for the quarter was up 42.4% on a year-over-year basis. Equities analysts predict that Carvana Co. will post 1.63 EPS for the current year.

Insiders Place Their Bets

In other Carvana news, CFO Mark Jenkins sold 63,750 shares of the firm's stock in a transaction dated Thursday, October 1st. The shares were sold at an average price of $61.64, for a total transaction of $3,929,550.00. Following the transaction, the chief financial officer owned 1,142,502 shares of the company's stock, valued at approximately $70,423,823.28. This trade represents a 5.28% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Thomas Taira sold 5,597 shares of the company's stock in a transaction that occurred on Monday, October 12th. The stock was sold at an average price of $65.00, for a total transaction of $363,805.00. Following the completion of the sale, the insider directly owned 357,442 shares of the company's stock, valued at approximately $23,233,730. This represents a 1.54% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 358,161 shares of company stock valued at $24,164,285. Corporate insiders own 15.19% of the company's stock.

Institutional Trading of Carvana

Several institutional investors have recently modified their holdings of CVNA. Mirae Asset Global Investments Co. Ltd. acquired a new position in Carvana during the third quarter valued at $13,419,000. Vise Technologies Inc. lifted its position in Carvana by 20.8% in the 3rd quarter. Vise Technologies Inc. now owns 38,114 shares of the company's stock worth $2,384,000 after buying an additional 6,554 shares in the last quarter. State of Wyoming boosted its stake in shares of Carvana by 12.4% during the 3rd quarter. State of Wyoming now owns 16,450 shares of the company's stock valued at $1,029,000 after buying an additional 1,821 shares during the period. Steadview Capital Management LLC grew its stake in Carvana by 3.6% in the third quarter. Steadview Capital Management LLC now owns 783,031 shares of the company's stock valued at $48,971,000 after purchasing an additional 27,415 shares in the last quarter. Finally, Choreo LLC raised its position in Carvana by 58.6% during the third quarter. Choreo LLC now owns 16,572 shares of the company's stock valued at $1,036,000 after acquiring an additional 6,123 shares in the last quarter. Institutional investors and hedge funds own 56.71% of the company's stock.

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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