Carvana Soars Following Its First 5-for-1 Stock Split.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 13 2026
0mins
Should l Buy AN?
Source: Barron's
- Stock Split Approval: Carvana's board has approved a 5-for-1 stock split.
- Accessibility for Investors: The split aims to make shares more affordable for individual investors and employees.
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Analyst Views on AN
Wall Street analysts forecast AN stock price to rise
5 Analyst Rating
4 Buy
1 Hold
0 Sell
Strong Buy
Current: 192.480
Low
230.00
Averages
248.60
High
300.00
Current: 192.480
Low
230.00
Averages
248.60
High
300.00
About AN
AutoNation, Inc., through its subsidiaries, is an automotive retailer in the United States. Its segments include Domestic, Import, Premium Luxury, and AutoNation Finance. The Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by Ford, General Motors, and Stellantis. The Import segment is primarily comprised of retail automotive franchises that sell new vehicles manufactured by Toyota, Honda, Hyundai, and Subaru. The Premium Luxury segment is primarily comprised of retail automotive franchises that sell new vehicles manufactured by Mercedes-Benz, BMW, Lexus, Audi, and Jaguar Land Rover. The franchises in each of its Domestic, Import, and Premium Luxury segments also sell used vehicles, parts and automotive services, and automotive finance and insurance products. The AutoNation Finance segment is comprised of its captive auto finance company, which provides indirect financing to qualified retail customers on vehicles it sells.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- High-Margin Service Business: By entering the dealership space, Carvana not only stands to increase new car sales but also benefits from the high-margin parts and service business, which is crucial for enhancing overall profitability, especially in the competitive used car sector.
- Inventory Acquisition Advantage: The dealership acquisitions allow Carvana to acquire inventory at more favorable prices, particularly through trade-ins, which are generally more valuable than auction purchases, thus bolstering its used car business nationally.
- Industry Consolidation Trend: Carvana's dealership acquisition strategy reflects the highly fragmented nature of the automotive retail industry, and as the sector moves towards significant consolidation, Carvana's market share and competitive advantages are expected to increase substantially, drawing investor interest.
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- Stock Split Approval: Carvana's board has approved a 5-for-1 stock split.
- Accessibility for Investors: The split aims to make shares more affordable for individual investors and employees.
See More
Rising Negative Equity Among New Car Buyers
- Rising Negative Equity: According to J.D. Power, 30.5% of new car buyers are facing negative equity on trade-ins, up 4.2 percentage points from last year, indicating increasing market pressures that affect consumer purchasing decisions.
- Record High Debt Levels: As of Q4 2025, the average amount owed on underwater trade-ins reached $7,214, a record high, with 27% of these trade-ins carrying over $10,000 in negative equity, reflecting a deterioration in consumer financial health.
- Increased Payment Burden: The average monthly payment for buyers rolling negative equity into new loans hit $916, which is $144 higher than the average payment for all new car purchases, indicating greater financial strain on consumers when buying vehicles.
- Extended Loan Terms Trend: Among new car purchases involving negative equity, 40.7% are financed with 84-month loans, suggesting that consumers are extending loan terms to cope with high vehicle prices, thereby increasing future negative equity risks.
See More
Three Companies Worth Holding Forever
- Carvana's Market Potential: Carvana has emerged from restructuring and improved profitability over the past three years, leveraging the fragmentation of over 43,000 used car dealerships in the U.S. to position itself as a more efficient competitor poised to thrive during upcoming industry consolidation, driving market share growth.
- Ferrari's Unique Advantages: Despite a 34% drop in stock price over the past six months, Ferrari's stock has nearly tripled the S&P 500 returns over the past decade, showcasing strong pricing power and resilience due to its exclusivity and loyal customer base, ensuring long-term investment returns.
- Nvidia's AI Dominance: Nvidia is set to achieve significant growth through 2030, driven by its dominance in the GPU market for global AI data centers, particularly as demand surges for autonomous and software-defined vehicles, establishing itself as a backbone of AI infrastructure expansion.
- Challenges of Long-Term Investing: While the strategy of buying and holding stocks seems straightforward, the rapid turnover of top businesses necessitates careful selection; however, with their unique competitive advantages, Ferrari, Nvidia, and Carvana demonstrate potential for long-term holding, warranting investor attention.
See More
Investment Opportunities in the Consolidating Auto Industry
- Carvana's Market Potential: After overcoming potential restructuring or bankruptcy scares, Carvana has transformed into a more efficient, vertically integrated, and profitable company, positioning itself favorably in the upcoming consolidation of the used car industry, where over 43,000 dealerships in the U.S. have a mere 2.3% market share.
- Ferrari's Competitive Edge: Despite a roughly 34% drop in Ferrari's stock over the past six months, it has nearly tripled the returns of the S&P 500 over the last decade, showcasing its strong competitive position and brand value in the luxury automotive market, with a unique sales strategy that excels during economic cycles.
- Nvidia's AI Dominance: Nvidia has become the backbone of AI infrastructure expansion by providing GPUs for global AI data centers, with substantial growth in demand expected through 2030, further solidifying its market position and profitability.
- Challenges of Long-Term Investment: While the strategy of holding quality stocks seems straightforward, the rapid market changes necessitate careful selection, with companies like Carvana, Ferrari, and Nvidia potentially thriving in the long run due to their unique competitive advantages.
See More
Carvana Acquires Stellantis Dealerships, Strategic Shift
- Strategic Acquisition: Carvana's recent purchase of its sixth Stellantis dealership signifies a shift from a purely e-commerce model to a hybrid sales approach, which is expected to enhance profit margins and expand market share.
- Market Share Growth: While Carvana holds only 1.6% of the used car retail market, acquiring dealerships allows it to strengthen its competitive edge in parts and services, leading to higher profitability.
- Inventory Acquisition Advantage: The dealership acquisitions enable Carvana to obtain inventory at more favorable prices, particularly through trade-ins, thereby boosting its used car business nationally.
- Industry Consolidation Trend: Carvana's acquisition strategy may accelerate consolidation in the automotive retail sector, and as the market moves towards centralization, investors should pay attention to companies like Carvana that possess competitive advantages.
See More
Carvana Acquires Sixth Stellantis Dealership, Expanding Sales Model
- Sales Model Shift: Carvana's recent acquisition of its sixth Stellantis dealership signifies a shift in its sales model, aiming to enhance profitability through a hybrid approach of new and used car sales, thereby strengthening its position in the competitive automotive retail market.
- High-Margin Service Business: By entering the dealership space, Carvana not only stands to increase new car sales but also benefits from the high-margin parts and service business, which is crucial for enhancing overall profitability, especially in the competitive used car sector.
- Inventory Acquisition Advantage: The dealership acquisitions allow Carvana to acquire inventory at more favorable prices, particularly through trade-ins, which are generally more valuable than auction purchases, thus bolstering its used car business nationally.
- Industry Consolidation Trend: Carvana's dealership acquisition strategy reflects the highly fragmented nature of the automotive retail industry, and as the sector moves towards significant consolidation, Carvana's market share and competitive advantages are expected to increase substantially, drawing investor interest.
See More
Carvana Soars Following Its First 5-for-1 Stock Split.
- Stock Split Approval: Carvana's board has approved a 5-for-1 stock split.
- Accessibility for Investors: The split aims to make shares more affordable for individual investors and employees.
See More
