Carvana Reports Strong Q4, But Investors Wary Amid Lack of Guidance

Key Points:

* Revenue exceeded estimates at $3.55 billion, up 32% year-over-year.
* Earnings per share beat consensus at $0.56.
* Retail unit sales reached 114,379, outperforming projections.
* Adjusted EBITDA came in at $359 million, surpassing expectations.
* Annual revenue hit a record $13.67 billion, with adjusted EBITDA margin of 10.1%.

Company Highlights:

* Carvana founder and CEO Ernie Garcia declared the company the "most profitable public automotive retailer in US history" based on adjusted EBITDA margin.
* Full-year sales soared 33% to 416,000 retail units.
* Outlook includes significant growth in unit sales and adjusted EBITDA in 2025.

Analyst Concerns:

* Shares fell over 14% after the conference call due to concerns about the lack of specific guidance for the company's future.

Industry Context:

* Carvana capitalized on the pandemic-driven demand for online car purchases.
* However, rising used car prices and high inventory levels have impacted profitability.
* The company has implemented cost-cutting measures and prudent inventory management to improve financial performance.

Controversy and Stock Performance:

* Activist short seller Hindenburg Research criticized Carvana's accounting practices in January.
* Carvana shares surged nearly 300% in 2024 and remained up 43% in 2025 before the latest earnings release.