Key Takeaways
- Carvana priced a $1.66 billion Term Loan B on August 12, refinancing its 2030 senior secured notes at nearly three points lower interest and cutting annual interest expense by $45 million.
- Ten buy ratings, six outperforms, seven holds and one sell make up the current Street view on Carvana stock, with a mean target 29% above the $64 close.
- TIKR’s model values Carvana stock at $114 by 2030, a 78% total return.
- The Street’s mean target has fallen 10% since June, from $92 to $83, even though the ratings split (10 buys, 6 outperforms, 7 holds, 1 sell) hasn’t changed since March.
Carvana Stock’s $45 Million Refinancing Win Lands as Targets Cool
Carvana (CVNA) priced a $1.66 billion Term Loan B on August 12, refinancing its 2030 senior secured notes at nearly three points lower interest and cutting annual interest expense by $45 million. The facility matures in 2033, issued at 99.75% of principal with pricing at one-month Term SOFR plus 225 basis points, and $1 billion of the old notes came due for redemption three days later.
The refinancing arrived two weeks after a rough print. Carvana’s full-year adjusted EBITDA guidance of $2.7 billion to $3.0 billion, issued alongside second-quarter results on July 29, missed the Street’s $2.97 billion estimate at the midpoint, and the stock fell 15% in the session that followed.
CFO Mark Jenkins tied the deal to a broader pattern on the August 12 J.P. Morgan Automotive Conference call, addressing why the market should read it as more than routine debt management: “We’re refinancing just under $1.7 billion of senior secured notes at just under 3-point lower interest rate, leading to the approximately $45 million in interest cost savings. As we get bigger, we get better, and having lower cost of capital is another example of how as we get bigger, we get better plays out.” That claim has math behind it. Carvana’s net debt to trailing 12-month adjusted EBITDA fell to 1.0 times in the second quarter, the lowest ratio in the company’s history, and the cheaper capital followed directly from it.
None of that erased the quarter’s other problem. Retail inventory grew slower than sales through the second quarter, a bottleneck Jenkins called out on the same call, and it is still the thing standing between Carvana and the margin recovery the Street wants to see. The refinancing did coincide with heavy insider selling: CFO Jenkins, COO Benjamin Huston and President Thomas Taira sold a combined $8.9 million of Class A shares between August 1 and September 14.
Carvana stock now has to prove that a cheaper balance sheet can carry the story while the operational fix, still incomplete, catches up.
Carvana Stock’s Price Targets Cool Even as Ratings Hold Steady
Carvana stock carries 10 buy ratings, 6 outperforms, 7 holds and 1 sell, the same split it held three months ago. Separately, 20 analysts publish a price target, and their mean sits at $83, 29% above the $64 close.
The mean target has fallen from $92 at the end of the second quarter to $83 now, a 10% cut in three months, while the stock itself slipped only 3%, from $66 to $64. The ratings split has not moved since March, holding at 10 buys, 6 outperforms, 7 holds and 1 sell across the March, June and September snapshots. Analysts are trimming the price they will pay for Carvana stock while holding the same conviction they had in March.
None of the six quarters in the table reflect the August refinancing yet. The next mean-target update will be the first chance to see whether analysts fold the cheaper debt into their models the way TIKR’s valuation already has.
TIKR Values Carvana Stock at $114, Pricing In the Refinancing’s Payoff
TIKR’s mid-case model values Carvana stock at $114 by December 2030, implying a 78% total return from the current price of $64, or 14% annualized over 4.3 years.
That 14% annualized rate sits well above what a low-single-digit industry grower would command, reflecting Carvana’s own 38% retail unit growth in the second quarter rather than a sector re-rating.
The gap between TIKR’s $114 target and the Street’s $83 mean sits exactly where Section 2 leaves off: the Street has not yet credited Carvana with the cheaper capital that came out of the August refinancing. A balance sheet running at 1.0 times leverage with $45 million in fresh annual savings is the kind of fundamental gain the model prices in years before the market catches up.
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 Carvana Co. stock 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.
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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!
