Key Stats for Carvana Stock
- Price change for Carvana stock: -7%
- $CVNA Stock Price as of Jul. 30: $61
- 52-Week High: $97
- $CVNA Stock Price Target: $90
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What Happened?
Carvana (CVNA) stock dropped sharply after the company’s full-year guidance fell short of what Wall Street wanted to see. Shares initially fell more than 20%, then recovered some ground to trade down roughly 7% ahead of the earnings call. The issue was guidance, not the quarter itself.
- Revenue stood at $7.38 billion against a $6.91 billion expectation
- EPS stood at $0.42 against a $0.37 expectation
- Carvana beat estimates on both earnings per share and revenue for Q2.
- But the company’s full-year adjusted EBITDA guidance of $2.7 billion to $3 billion landed below analyst forecasts, including Deutsche Bank’s $3 billion to $3.2 billion estimate and Morgan Stanley’s much higher $4.45 billion call.
- That guidance implies a fairly flat second half compared to the first half of the year, with $1.3 billion to $1.6 billion in adjusted earnings expected between July and December.
- Even at the low end, that would still beat Carvana’s full-year 2025 record of $2.2 billion in adjusted earnings.
Looking at the quarter itself, Carvana sold 197,325 vehicles, up 38% year-over-year. Net income came in at $513 million, up $205 million from a year ago.
Adjusted EBITDA hit a record $769 million for the quarter, slightly ahead of estimates.
However, gross profit per unit, a metric investors watch closely, fell about 6% and missed some analyst expectations.
Adjusted EBITDA margin came in at 10.4%, down 2 percentage points from last year as the company continues investing in expansion.
CEO Ernie Garcia called this Carvana’s 10th straight quarter of leading the industry in both growth and profitability. He said the company remains on track toward its longer-term goal of selling 3 million cars a year with a 13.5% adjusted EBITDA margin sometime between 2030 and 2035.
Garcia also pointed out that Carvana still holds just 2% of the used car market and 1.5% of total auto retail, leaving what he described as a huge runway ahead.
Carvana expects retail units sold to increase sequentially in Q3 compared to Q2. The company hasn’t broken out how much of its growth is coming from new vehicle sales, which it has been expanding through Stellantis franchised dealerships.
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What the Market Is Telling Us About Carvana Stock
The sharp initial drop shows investors were focused squarely on the earnings guidance gap rather than the quarter’s actual results.
Beating estimates on revenue and EPS wasn’t enough to offset a full-year outlook that came in well below some Wall Street targets, especially Morgan Stanley’s much higher number.
Still, the partial recovery in Carvana stock from a 20% drop to around 8% suggests some investors see the underlying growth story, 38% unit sales growth and record EBITDA, as reasons for patience even with more conservative guidance ahead.
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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!
