Free Trial

This Stock's Price Shifts Into High Gear With Analyst Upgrades

Close up of a man's hand on the gear lever of a car, concept of speed and gear lever, close up of hands accelerating on the gear lever

Key Points

  • Carvana analysts signal a shift in sentiment that has the stock moving higher.
  • Institutional buying is a tailwind for the market and pushes it to multi-year highs.
  • Short interest is still a factor and added fuel to this rally.
  • 5 stocks we like better than Carvana

A single analyst's upgrade can excite a market; a trend of upgrades can lift it, which is lifting Carvana NYSE: CVNA—a trend in upgrades signaling a shift in sentiment and a sustainable rally for this stock. The upgrade trend is strong enough to put CVNA on MarketBeat’s list of Most Upgraded Stocks, which is significant because Carvana has been prominent on the list of Lowest Rated Stocks for many quarters. The takeaway is that this once stalled investment is rebounding, and the rebound is shifting into high gear. 

Carvana Today

Carvana Co. stock logo
CVNACVNA 90-day performance
+0.88 (+0.68%)
(As of 07/19/2024 ET)
52-Week Range
P/E Ratio
Price Target

The latest revision comes from Needham. Senior Analyst Chris Pierce and team upgraded the stock to Buy from Hold, calling it a secular growth story with a cyclical kicker. The secular growth story involves the company’s digital-first operating model, under-utilized brick-and-mortar footprint, and an outlook for industry-leading growth. The growth will be driven by unit sales and increased market share in the retail and wholesale markets. The cyclical recovery kicker involves the analysts' sentiment. Needham views sentiment as bottoming and entering an upgrade cycle that could last several quarters. Needham’s new $160 is the new high target from analysts and may be reached soon. 

Institutional Tailwinds Lift Carvana to Two-Year High

Analysts are not the only sell-siders interested in Carvana. The institutions, the largest group of investors in the market, have bought this stock on balance for six consecutive quarters and increased their holdings to over 55%. The Q2 action is noteworthy because of numerous large position increases, including a 40% gain for T. Rowe Price, which now owns 3.7% of the shares. 

Vanguard holds about 5% of the stock in its funds and increased its holdings by 3%. The more significant activity is from the numerous smaller funds and private institutions that increased their holdings by triple digits. Those include the State Board of Administration of Florida Retirement System (+302%), Cetera Investment Advisors (+170%), and GAMMA Investing LLC (+127%). 

Carvana MarketRank™ Stock Analysis
Overall MarketRank™
2.77 out of 5
Analyst Rating
24.8% Downside
Short Interest
Dividend Strength
News Sentiment
0.60mentions of Carvana in the last 14 days
Insider Trading
Selling Shares
Projected Earnings Growth
See Full Details

The reason for the bullishness is the results. The company hit the skids in 2021 but bottomed in 2022 on an expectation that an industry cycle low had been reached. This year's catalyst was the Q1 results, which affirmed the outlook and gave a little more. The FQ1 results included top and bottom line strength, a return to growth, and record net income. Revenue growth topped 17%, outpacing consensus by 1200 bps on strength in units and pricing. 

The earnings were another real shocker, reversing a loss posted in the prior year and outpacing the consensus reported by MarketBeat by nearly $1.00. However, the guidance has the market shifting into high gear. The company didn’t give specific guidance but is forecasting a sequential acceleration in the YOY growth pace and for earnings strength to continue. 

Expectations Build for Carvana: Q2 Results Will be a Catalyst

The analysts are building solid expectations for Carvana’s Q2 results but may still underestimate the recovery. The ten revisions tracked by MarketBeat are all upward, but expect only 10% revenue growth at the consensus. Further, the consensus forecasts a quarter of GAAP and adjusted losses contrary to guidance. Q2 results are due at the end of July.

Short interest is another factor aiding the rally in this stock. Although short interest is falling, it was still a high 10% in mid-June, fueling a short-covering rally. 

The technical picture for this automotive stock is robust. It is moving up off its bottom and regularly knocking out resistance levels. The latest analysts' upgrades have the market trading at a two-year high, supported by the 30-day moving average. With this trend in place, the stock will likely continue to move higher in 2024. The next target for significant resistance is near $150, which may be reached by mid-summer, assuming the Q2 results are good. 

Carvana CVNA stock chart

→ [URGENT] Altcoin Winning Picks (From Crypto Swap Profits) (Ad)

Should you invest $1,000 in Carvana right now?

Before you consider Carvana, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Carvana wasn't on the list.

While Carvana currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Ten Starter Stocks For Beginners to Buy Now Cover

Just getting into the stock market? These 10 simple stocks can help beginning investors build long-term wealth without knowing options, technicals, or other advanced strategies.

Get This Free Report
Thomas Hughes
About The Author

Thomas Hughes

Contributing Author

Technical and Fundamental Analysis

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Carvana (CVNA)
2.7707 of 5 stars
2.77 / 5 stars
Compare These Stocks  Add These Stocks to My Watchlist 

Featured Articles and Offers

Opportunities Arise as Stock Market Rotates from Big Tech

Opportunities Arise as Stock Market Rotates from Big Tech

Discover how the great stock rotation is shaking up the market and what it means for your investments, including the companies poised for growth.

Related Videos

3 Top Market Leaders Splitting Their Stocks
CPI News Breakdown: Key Market Moves to Follow
Inside Pelosi’s Latest Stock Moves

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines