Key Takeaways
- After Q3 results, Needham cut its Carvana price target to $100 from $120 and kept its Buy rating. The new target is 47% above the stock’s Oct. 29 close.
- Carvana sold a record 217,385 cars in the quarter, up 39%, but its adjusted EBITDA per car fell from a year earlier.
- Needham’s target implies about 44x forward earnings, a little below the stock’s 46x average over the past year, and 2027 earnings estimates have gone up.
- The multiple looks fair, but reaching the target depends on Carvana’s loan profits recovering while interest rates rise.
Carvana (CVNA) is trading at $69 at the time of writing, 30% below its January high. Needham recently cut its price target to $100 from $120, and kept its Buy rating.
Three hits since January
On Jan. 28, a short seller’s report on Carvana’s ties to the Garcia family’s DriveTime sent the stock down as much as 17% that day.
On July 29, Carvana guided to $2.7 billion to $3.0 billion of 2026 adjusted EBITDA. The middle of that range was below the $2.9 billion analysts expected, according to LSEG, and shares fell 14% after hours.
And in Q3, adjusted EBITDA per car fell from a year earlier for the fourth quarter in a row, to about $3,680 from $4,085.
What Needham sees
Earlier this year, analyst Chris Pierce said worries about retail profit per car had proved short-lived. He valued the stock on 2028 adjusted EBITDA, assuming Carvana sells 3 million cars a year by 2033.
The Q3 backed him up on retail. Units rose 39% to a record 217,385, non-GAAP retail gross profit per car rose $85, and SG&A per car held about flat.
TIKR tracks 24 analysts on Carvana. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Carvana, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Carvana’s Analyst Ratings
Does $100 add up?
The average target of the 24 analysts who cover Carvana has slipped to $81 from $85 a year ago, after peaking at $97 in January:
That average is 19% above the price, and Needham’s $100 is 23% above the average.
Earnings estimates have gone the other way. Analysts expect earnings per share to dip to $1.52 this year, then climb to $2.25 in 2027 and $2.71 in 2028:
The 2027 figure is up 8% in 90 days, and the report barely moved it.
Carvana traded at 26x forward earnings at the Oct. 28 close, down from 63x at the end of 2025. Needham’s $100 works out to about 44x, a little below the stock’s 46x average over the past year.
The loan business decides it
Non-GAAP other gross profit per car, which is mostly gains on selling the loans Carvana writes, fell $299 from a year earlier. Carvana cut the rates it charges buyers while benchmark rates rose.
My take: Needham’s multiple is fair, and its retail case held up. But $100 also needs the loan line to recover, and I’d wait for it to turn before buying for the rebound.
The Q4 report in February is the next check. It will come without a 2027 outlook, because Carvana plans to stop giving quarterly or annual guidance.
So what is Carvana stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Carvana could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
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 of the stocks mentioned. Thank you for reading, and happy investing!
