Shares of Carvana Co (NYSE:CVNA) rallied in early trading on Thursday, after the company on Wednesday reported its third-quarter results.
Here are some key analyst takeaways:
- Needham analyst Chris Pierce reiterated a Buy rating, while lowering the price target from $120 to $100.
- BTIG analyst Marvin Fong reaffirmed a Buy rating, while cutting the price target from $87 to $82.
- DA Davidson analyst Michael Baker maintained a Buy rating and price target of $67.
Check out other analyst stock ratings.
Needham: Carvana continued to gain market share, with retail used units growing around 40%, "despite increasingly difficult comps and a flat industry backdrop," Pierce said in a note.
Consensus unit estimates "look achievable," with the company already having the capacity to recondition 1.5 million cars per year and room to expand to 3 million, the analyst stated. This sets up Carvana for long-term, profitable growth, with adjusted EBITDA growing at a CAGR (compounded annual growth rate) of around 30%, he added.
BTIG: Carvana topped consensus expectations across all major KPIs, Fong said. He added, however, that higher-than-expected expenses resulted in a "relatively modest" bear on adjusted EBITDA, which came in at $800 million versus consensus of $791 million.
Management indicated that higher fuel costs and benchmark rates negatively impacted gross profit per unit (GPU), translating to an EBITDA drag of around $43 million, the analyst stated.
The results support the thesis that Carvana can increase its market share "while maintaining industry-leading unit economics," he further wrote.
Fong raised the revenue and adjusted EBITDA estimates for the fourth quarter from $7.6 billion to $8 billion and from $685 million to $708 million, respectively.
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DA Davidson: Carvana achieved retail unit growth of 39%, which "far outpaced competitors," indicating "massive" market share gains, with industry-leading margins, Baker said. The company’s trailing 12-month EBITDA margin stands at 10%, versus others in the 3.7%-5.7% range, he added.
Management raised their 2026 outlook to "the high end" of the previous guidance range of $2.7-$3 billion, the analyst stated. With $2.24 billion generated year to date, including the third-quarter beat, the guidance implies $609-$759 million in the fourth quarter, he further noted.
CVNA Price Action: Shares of Carvana had risen by 15.47% to $68.15 at the time of publication on Thursday.
Photo: Inside a Carvana vending tower, courtesy Carvana