Gordon Haskett analyst Robert Mollins has begun coverage on Carvana (CVNA, Financial), assigning it a Hold rating and setting a target price of $329. The analyst recognizes Carvana's success in gaining market share. However, the stock is currently priced higher than its peers, and upcoming quarters may see volume pressure due to demand being pulled forward by tariffs.
Despite Carvana's improved financial standing compared to previous years, Gordon Haskett expresses caution regarding the company's long-term growth strategy. The firm plans to monitor Carvana's ability to consistently meet its ambitious 5-10 year targets before adopting a more positive outlook on the shares.
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 $319.34 with a high estimate of $440.00 and a low estimate of $148.00. The average target implies an downside of 7.08% from the current price of $343.67. More detailed estimate data can be found on the Carvana Co (CVNA) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, Carvana Co's (CVNA, Financial) average brokerage recommendation is currently 2.2, 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 $56.30, suggesting a downside of 83.62% from the current price of $343.67. 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: May 07, 2025
- Retail Units Sold: 133,898, an increase of 46% year-over-year.
- Revenue: $4.232 billion, an increase of 38% year-over-year.
- Adjusted EBITDA: $488 million, an increase of $253 million, with an 11.5% margin.
- Net Income: Positive for the fifth consecutive quarter.
- Non-GAAP Retail GPU: $3,308, an increase of $97 year-over-year.
- Non-GAAP Wholesale GPU: $964, a decrease of $189 year-over-year.
- Non-GAAP Other GPU: $2,868, an increase of $430 year-over-year.
- Non-GAAP SG&A Expense: $468 million, an increase of 20% year-over-year.
- GAAP Operating Income: $394 million, with a 9.3% margin.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Carvana Co (CVNA, Financial) achieved a record adjusted EBITDA margin of 11.5% in Q1 2025, within their long-term target range of 8% to 13.5%.
- The company reported a 46% increase in retail units sold, totaling 133,898, setting a new company record.
- Revenue reached $4.232 billion, marking a 38% increase and a new company record.
- Carvana Co (CVNA) has maintained positive net income for the fifth consecutive quarter.
- The company has successfully leveraged SG&A expenses, reducing non-GAAP SG&A expense per retail unit sold by $750.
Negative Points
- Non-GAAP wholesale GPU decreased by $189 year-over-year, primarily due to faster growth in retail units than wholesale vehicle units.
- The company faces potential challenges from macroeconomic factors such as tariffs, which could impact car prices and consumer demand.
- There is concern about maintaining high growth rates and operational efficiency as the company scales to its target of 3 million annual retail sales.
- Carvana Co (CVNA) needs to continue investing in customer experience improvements to maintain competitive differentiation.
- The company must manage the balance between growth and margin, prioritizing growth over margin within reasonable ranges, which could impact profitability.