Carvana Surprises with Q4 Earnings Beat, Stock Dips
Online car retailer Carvana (CVNA) exceeded revenue and profit expectations in Q4, continuing its push towards profitability. However, shares fell by over 8% in pre-market trading on Thursday.
Key Metrics:
* Revenue: $3.55 billion vs. $3.34 billion estimate
* EPS: $0.56 vs. $0.31 estimate
* Adjusted EBITDA: $359 million vs. $329.4 million estimate
* Retail unit sales: 114,379 vs. 108,339 estimate
Company Outlook:
Carvana predicts "significant growth" in retail unit sales and adjusted EBITDA for 2025, with a sequential increase in both metrics expected in Q1.
Past Performance and Challenges:
* Carvana achieved record adjusted EBITDA of $1.378 billion in 2024, becoming the most profitable public automotive retailer in US history.
* In 2024, Carvana shares surged nearly 300%, with a 43% gain year-to-date in 2025.
* Facing rising used car prices and slowing demand, Carvana was forced to reduce operating costs, refinance debt, and scale up by 2023, leading to its first annual profit.
Controversy and Short Seller Report:
In January 2023, short seller Hindenburg Research accused Carvana of financial irregularities, subprime lending, and lax underwriting standards. Hindenburg subsequently wound down its operations.
Carvana shares have experienced volatility since the report but have recently reached a new 52-week high.
Stay tuned for further updates on Carvana's performance and the impact of its recent earnings release on its stock price.