Key Takeaways:
- Carvana grew its 2025 revenue 49% to $20.3 billion, with retail units sold up 43% to nearly 597,000.
- CVNA stock could reasonably reach $718 per share by December 2028, based on our valuation assumptions.
- This implies a total return of 78.2% from today’s price of $403, with an annualized return of 23.9% over the next 2.7 years.
What Happened?
Carvana (CVNA) has become one of the market’s most dramatic turnaround stories. The stock is up about 82% over the past year, and investors are now debating whether the company can keep scaling profitably after a huge recovery from its 2022 lows.
The company delivered record 2025 results, with revenue of $20.3 billion, net income of $1.9 billion, and adjusted EBITDA of $2.2 billion. Retail units sold rose 43%, showing that Carvana is gaining scale while the used-car market remains highly competitive.
Recent trading has also been shaped by its first 5-for-1 stock split. Carvana said split-adjusted trading is expected to begin on May 7, pending shareholder approval at the May 5 annual meeting. Reuters reported the stock rose after the announcement, as the split could improve accessibility and liquidity.
Investors are still watching costs closely. The stock fell after Q4 because adjusted EBITDA missed expectations, even though revenue and unit sales were strong.
Here’s why Carvana stock could deliver strong returns through 2029 if unit growth, gross profit per vehicle, and operating discipline continue improving.
What the Model Says for Carvana Stock
We analyzed the upside potential for Carvana stock using valuation assumptions based on rapid revenue growth, improving used-car retail economics, and stronger operating leverage as the company scales.
Based on estimates of 24.0% annual revenue growth, 9.3% operating margins, and a normalized P/E multiple of 50.0x, the model projects Carvana stock could rise from $403 to $718 per share.
That would be a 78.2% total return, or a 23.9% annualized return over the next 2.7 years.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for Carvana stock:
1. Revenue Growth: 24%
Carvana’s growth accelerated sharply in 2025 as retail unit sales climbed and revenue reached $20.3 billion. The company sold nearly 597,000 retail vehicles during the year, showing that its online used-car model continues to gain share.
The next phase depends on whether Carvana can keep expanding volume without giving back too much margin. Used-car affordability, inventory availability, financing demand, and reconditioning capacity all affect how quickly revenue can grow.
Based on analysts’ consensus estimates, we used a 24.0% forecast. That reflects continued share gains from Carvana’s digital retail model, but also assumes growth slows from the 49% pace delivered in 2025.
2. Operating Margins: 9.3%
Carvana’s operating margin reached 9.3% in 2025, a major improvement from prior years of losses. That matters because the company’s model has high fixed-cost leverage once reconditioning centers, logistics, and technology infrastructure are better utilized.
Gross margin was 20.6% in 2025, and EBITDA reached $2.2 billion. This shows the turnaround is no longer just about revenue growth; it is also about converting higher vehicle volume into stronger profit.
Based on analysts’ consensus estimates, we use 9.3% operating margins. That assumes Carvana can hold recent profitability gains while managing reconditioning costs, logistics expenses, and financing-related pressure.
3. Exit P/E Multiple: 50x
Carvana’s valuation remains aggressive because investors are pricing in sustained growth and margin expansion. The stock trades at a premium to most auto retailers because the market views it as a scalable digital platform, not just a traditional dealership chain.
That premium also creates risk. If unit growth slows or margins weaken, the multiple could compress quickly because expectations are high.
Based on analysts’ consensus estimates, we maintain a 50.0x exit multiple. That reflects Carvana’s growth profile, improving profitability, and potential to keep gaining share in used-car retail.
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What Happens If Things Go Better or Worse?
Different scenarios for CVNA stock through 2030 show varied outcomes based on retail unit growth, margin execution, and valuation discipline (these are estimates, not guaranteed returns):
- Low Case: Used-car demand slows, and margin gains prove harder to sustain → 18.7% annual returns
- Mid Case: Carvana keeps scaling retail units while holding stronger profitability → 23.3% annual returns
- High Case: Market share gains accelerate, and operating leverage expands faster → 28.0% annual returns
The stock’s next move likely depends on Q1 2026 results and management’s updated growth commentary. The April 29 earnings call should give investors more detail on unit growth, GPU, and cost trends. If Carvana keeps expanding revenue while protecting margins, the valuation case could remain supported.
See what analysts think about CVNA stock right now (Free with TIKR) >>>
Should You Invest in Carvana Co.?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up CVNA, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track CVNA alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
Analyze Carvana stock on TIKR Free→
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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!
