Carvana Reports Q4 Beat, Shares Pull Back on Lack of Guidance
Online car retailer Carvana (CVNA) posted a revenue and profit beat for the fourth quarter of 2024, continuing its drive towards profitability. However, shares dropped by over 15% in premarket trading on Thursday as analysts expressed concerns about the company's vague forward guidance.
Financial Highlights:
* Revenue: $3.55 billion (up 32% YoY)
* Earnings per share: $0.56 (vs. $0.31 estimated)
* Adjusted EBITDA: $359 million (vs. $329.4 million estimated)
* Retail unit sales: 114,379 (vs. 108,339 estimated)
* Record adjusted EBITDA: $1.37 billion for 2024
* Annual revenue: $13.67 billion (up 33% YoY)
Guidance:
Carvana anticipates "significant growth" in retail units sold and adjusted EBITDA for full-year 2025. It expects sequential increases in both metrics in Q1, contingent on a stable market environment.
Company Performance:
Driven by the pandemic's focus on personal vehicle ownership and remote purchasing, Carvana experienced a surge in sales from 2020 to 2021. However, rising used car values in 2022 created inventory challenges, forcing Carvana to invest heavily to acquire assets. The company tightened its spending, cut operating costs, and reduced used car purchases in response to consumer reluctance driven by higher prices.
Controversy:
Carvana's recent success has been met with scrutiny. Hindenburg Research accused the company of accounting irregularities, mounting subprime loans, and lax underwriting standards. Hindenburg's report, which previously led to the downfall of Nikola, has since been discontinued.