Carvana (CVNA, Financial) reported first-quarter revenue of $4.23 billion, surpassing the market consensus of $4.0 billion. The company achieved unparalleled success in its retail operations, setting a new record for retail units sold. This performance also marked historic levels of profitability and the highest customer satisfaction score in nearly three years.
According to Ernie Garcia, Carvana's founder and CEO, the company is optimally positioned for future growth. Carvana aims to enhance its financial outcomes and further expand its operations. As the company continues to grow and streamline, it focuses on improving speed and convenience, aiming to share increased value with its customers, thereby transforming the car buying and selling experience.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Carvana Co (CVNA, Financial) is $257.69 with a high estimate of $340.00 and a low estimate of $148.00. The average target implies an downside of 0.57% from the current price of $259.17. More detailed estimate data can be found on the Carvana Co (CVNA) Forecast page.
Based on the consensus recommendation from 23 brokerage firms, Carvana Co's (CVNA, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Carvana Co (CVNA, Financial) in one year is $48.10, suggesting a downside of 81.44% from the current price of $259.17. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Carvana Co (CVNA) Summary page.
CVNA Key Business Developments
Release Date: February 19, 2025
- Adjusted EBITDA: $1.38 billion for FY 2024, with a margin of 10.1%.
- GAAP Operating Income: $990 million for FY 2024, with a margin of 7.2%.
- Net Income: $404 million for FY 2024, with a margin of 3.1%.
- Retail Units Sold: 114,379 in Q4 2024, a 50% increase year-over-year.
- Revenue: $3.547 billion in Q4 2024, a 46% increase year-over-year.
- Non-GAAP Retail GPU: $3,331 in Q4 2024, an increase of $361 year-over-year.
- Non-GAAP Wholesale GPU: $857 in Q4 2024, a decrease of $24 year-over-year.
- Non-GAAP Other GPU: $2,728 in Q4 2024, an increase of $849 year-over-year.
- Non-GAAP SG&A Expense: $432 million in Q4 2024, a 15% increase year-over-year.
- Adjusted EBITDA (Q4): $359 million, a $299 million increase year-over-year.
- Cash and Liquidity: Over $1.7 billion in cash and $3.6 billion in committed liquidity resources at the end of 2024.
- Net Debt to Adjusted EBITDA Ratio: 2.8 times at the end of 2024.
- Adjusted EBITDA to Interest Expense Ratio: More than 2 times at the end of 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Carvana Co (CVNA, Financial) achieved the status of the most profitable public automotive retailer in US history by adjusted EBITDA margin while being the fastest growing.
- The company reported a 33% year-over-year growth rate in FY 2024 retail units sold, significantly outpacing the industry.
- Carvana Co (CVNA) set new company records in several financial metrics, including adjusted EBITDA of $1.38 billion and a net income of $404 million.
- The company successfully integrated 6 of the 56 ADESA sites in 2024, with plans to open approximately another 10 mega sites this year.
- Carvana Co (CVNA) improved operational efficiencies, resulting in a $1,165 reduction in non-GAAP SG&A expenses per retail unit sold.
Negative Points
- Non-GAAP wholesale GPU decreased by $24 year-over-year, driven by faster growth in retail units than wholesale vehicle and wholesale marketplace units.
- The overhead portion of SG&A expense increased by $9 million, primarily driven by nonrecurring items.
- Despite strong performance, Carvana Co (CVNA) carries many expenses that support retail unit sales capacity of over 1 million units, which may impact future profitability.
- The company faces execution risks in achieving significantly more scale, especially with the integration of ADESA mega sites.
- Carvana Co (CVNA) continues to operate in a highly fragmented market, with its largest direct competitor holding about a 2% market share.
