Carvana Targets Earnings Boost to Rebound to All-Time Highs
Carvana (NYSE: CVNA) is poised to report its fourth-quarter results after the bell on Wednesday, seeking another surge in earnings to propel its shares back to record levels.
Recent Trajectory and Expectations
In 2024, Carvana's stock skyrocketed by nearly 300% and has continued to climb in 2025, reaching a new 52-week high. Analysts now anticipate the company to post revenue of $3.34 billion for the quarter, a 32% year-over-year increase. Adjusted EPS is projected at $0.31, while adjusted EBITDA is estimated at $329.4 million.
Unit Sales and Gross Profit
Retail unit sales are expected to reach 108,339, with a retail gross profit of $3,219 per unit. Wholesale vehicle unit sales are forecast to hit 52,018, generating a gross profit of $714.21.
Recovery from Pandemic and Inventory Challenges
During the early stages of the COVID-19 pandemic, Carvana flourished as buyers favored the safety and convenience of purchasing vehicles online. However, soaring used car values in 2022 forced Carvana to invest heavily in inventory, leading to unsustainable costs. Subsequently, the company implemented cost-cutting measures and became more selective in its used car purchases.
Recent Controversy and Market Volatility
Carvana's recent surge has not been without controversy. In January, Hindenburg Research accused the company of "accounting grift" and questioned its underwriting standards. Despite Hindenburg's allegations, Carvana has maintained its focus on improving its financial performance.
Outlook and Expectations
Carvana's turnaround strategy and recent operational improvements have poised it for continued growth. If the company meets or exceeds analysts' expectations for the fourth quarter, its shares are likely to rebound towards their previous all-time highs. Investors will closely monitor the company's results and guidance for insights into its future prospects.