Key Stats for Carvana Stock
- Price Change: -7.95%
- Current Price: $332.79
- Valuation Model Target: $704.40
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What Happened?
Carvana (CVNA) shares unexpectedly dropped 7.95% this week, closing at $332.79.
The selloff confused many retail investors because Carvana completely obliterated its Q4 earnings estimates, proving its historic corporate turnaround is still firing on all cylinders.
The online auto retailer reported a staggering EPS of $4.22, utterly destroying the Wall Street expectation of just $1.10.
Furthermore, the company generated $5.60 billion in revenue and saw a massive 43% year-over-year growth in retail units sold, moving a record 163,522 vehicles in the fourth quarter alone.
So why did the stock fall so sharply?
The drop was driven by a classic “sell the news” profit-taking event.
Carvana’s stock had already run up significantly in the weeks leading up to the print. Traders had essentially priced in a flawless quarter, leaving zero room for error or nuance.
The used car market is fiercely fragmented, and Carvana currently holds just a 1.6% market share.
As traditional brick-and-mortar dealerships continue to struggle with high interest rates and bloated overhead, Carvana’s highly automated e-commerce model is fundamentally changing how consumers buy cars.
See analysts’ growth forecasts and price targets for Carvana stock (It’s free!) >>>
Is Carvana Undervalued Today?
The TIKR Model indicates that the market’s hyper focus on a single quarter of “peak margins” is entirely missing the long-term compounding machine that Carvana is building.
The model projects a target price of $704.40, representing a staggering 111.7% upside from current levels.
Management was quick to point out that they have fundamentally changed the underlying business model, shifting from high cash burn to immense, sustainable profitability.
CEO Ernie Garcia confidently framed the company’s trajectory during the earnings call, stating verbatim: “With every step, our path to our current goal of 3 million retail units a year and 13.5% adjusted EBITDA margin becomes clear, and this year was a big step.”
He further emphasized the massive runway ahead, noting: “We grew by 43% in 2025, meaning that the compounding annual growth rates necessary to hit our 2030 to 2035 retail unit goal are now 38% and 18%, respectively.”
Read the full Carvana Transcript on TIKR to see the margin breakdown >>>
Valuation Deep Dive
The TIKR Advanced Valuation Model identifies Carvana as a hyper-growth compounder that is actively taking market share in a massively fragmented industry.
- Target Price: $704.40
- Current Price: $332.79
- Annualized Return: 16.7%
The AI and Automation Moat: Carvana’s operating leverage is expanding rapidly due to automation. The company noted that 30% of its retail customers and 60% of its selling customers now complete their entire transaction without ever speaking to a human. This systemic efficiency allows the company to handle higher volumes with significantly lower overhead, driving long-term EBITDA margin expansion.
Massive Unit Economics: Despite Wall Street’s fears of peaking margins, Carvana generated a record 11% adjusted EBITDA margin in 2025. By continuously lowering transit distances, reducing customer shipping fees, and improving reconditioning center throughput, the TIKR Model projects Carvana will easily absorb minor cyclical hits to used car pricing while still dominating the national retail market.
Conclusion: A temporary dip in a generational compounder. With a projected 111.7% total return potential, the recent 8% pullback is an absolute gift for long-term investors. The path to $704 is secured by Carvana’s rapid unit growth, expanding automation, and a clear, mathematical trajectory toward its 3 million vehicle goal.
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How Much Upside Does Carvana Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
