Carvana Achieves Record Financial Performance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 15 2026
0mins
Should l Buy CVNA?
Source: NASDAQ.COM
- Sales Unit Growth: In 2022, Carvana sold 596,641 used cars, marking a 43% increase from the previous year, which propelled the company's annual revenue to a record $20.3 billion, reflecting its strong recovery in the market.
- Record Net Income: The company achieved a net income of $1.9 billion in 2022, an increase of over $1 billion from the prior year, indicating a successful transformation and profitability after overcoming financial distress, thereby boosting investor confidence.
- Market Share Potential: With Carvana's market share at only 1.6%, the highly fragmented U.S. used car market, where the top 100 retailers hold just 11.1% of the total market, presents significant growth opportunities for Carvana to expand its market presence.
- Profitability Enhancement: Carvana plans to continue improving retail unit sales and adjusted EBITDA in 2023, demonstrating its strategic commitment to optimizing operations and enhancing profitability, which is expected to drive long-term sustainable growth.
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Analyst Views on CVNA
Wall Street analysts forecast CVNA stock price to rise
18 Analyst Rating
16 Buy
2 Hold
0 Sell
Strong Buy
Current: 312.090
Low
395.00
Averages
497.94
High
550.00
Current: 312.090
Low
395.00
Averages
497.94
High
550.00
About CVNA
Carvana Co. is a holding company. The Company operates an e-commerce platform for buying and selling used cars. The Company primarily acquires used vehicle inventory directly from customers, used car auctions, and wholesale used vehicle suppliers, including retail marketplace partners. Once it acquires a vehicle, the Company leverages its in-house logistics network or a vendor to transport the vehicle to one of its inspection and reconditioning centers (IRC) or auction locations with reconditioning capabilities, at which point the vehicle enters its inventory management system. The Company offers a mobile-optimized Website, where prospective retail car buyers can immediately begin browsing, researching, filtering, and identifying their vehicle of choice, where it offers an annotated virtual vehicle tour, which includes a 360-degree view of the interior and exterior of the actual vehicle. The Company also offers integrated financing using its loan origination platform.
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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- 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.
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- Profitability Decline: Carvana reported a revenue of $5.60 billion in Q4 2025, exceeding estimates, yet the EPS of $4.22 led to a stock drop of over 20%, indicating market concerns about deteriorating fundamentals.
- Unit Economics Pressure: Despite strong unit growth, Carvana's gross profit per unit (GPU) declined, with adjusted EBITDA margins falling from 10.1% to 9.1%, suggesting significant risks to profitability at a critical juncture.
- Tightening Financing Conditions: As Ally Financial reduced its loan purchase commitments, Carvana was forced to offload riskier loans under inferior economic conditions, compressing its high-margin financial GPU and increasing financial risks.
- Market Confidence Erosion: Allegations from Gotham City Research regarding undisclosed related-party transactions and overstated earnings, coupled with insider selling and institutional exits, have significantly shaken market confidence in Carvana's future prospects.
See More
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- Investment Strategy Shift: EMJ Capital founder Eric Jackson emphasizes the need for investors to remain nimble and focus on high-conviction plays amid escalating geopolitical uncertainty, particularly during market volatility.
- Peloton Value Assessment: Jackson highlights Peloton's margin of safety, noting its $345 million in free cash flow over the past 12 months, with cash representing 67% of its market cap, indicating potential value in uncertain environments.
- Market Bottom Expectations: He compares Peloton's current situation to Carvana's market bottom in December 2022, suggesting that the company has a promising outlook even amidst war, implying significant upside potential for its stock price.
- Short-term Investment Opportunities: Jackson believes that short-term investment opportunities are more pronounced in the current environment, especially for companies that have been overlooked but are showing fundamental improvements, with Peloton being a prime example.
See More
Three Stocks to Buy and Hold for the Next Decade
- Carvana Growth Potential: Carvana sold nearly 600,000 vehicles in 2024, a 43% increase, and despite its small market share, it is expected to benefit from the growing trend of online car purchases, driving revenue growth and record profits in the coming years.
- Chewy's Market Strategy: Chewy's quarterly revenue reached $3.26 billion, with 84% coming from 'autoship' customers, showcasing its competitive edge in the pet supply e-commerce sector, and it is likely to continue attracting consumers seeking convenience.
- SoFi Customer Growth: As of last year, SoFi Technologies served 13.7 million unique customers, a 35% year-over-year increase, and in the increasingly digital banking landscape in the U.S., SoFi meets consumer demand for convenience, positioning itself for strong growth ahead.
- Online Shopping Trend: With more consumers shifting to online shopping, companies like Carvana, Chewy, and SoFi are at the forefront of industry transformation, poised for sustained business expansion and market share growth over the next decade.
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
Bearish Thesis on Carvana Co. Stock Performance
- Profitability Decline: Carvana reported a revenue of $5.60 billion in Q4 2025, exceeding estimates, yet the EPS of $4.22 led to a stock drop of over 20%, indicating market concerns about deteriorating fundamentals.
- Unit Economics Pressure: Despite strong unit growth, Carvana's gross profit per unit (GPU) declined, with adjusted EBITDA margins falling from 10.1% to 9.1%, suggesting significant risks to profitability at a critical juncture.
- Tightening Financing Conditions: As Ally Financial reduced its loan purchase commitments, Carvana was forced to offload riskier loans under inferior economic conditions, compressing its high-margin financial GPU and increasing financial risks.
- Market Confidence Erosion: Allegations from Gotham City Research regarding undisclosed related-party transactions and overstated earnings, coupled with insider selling and institutional exits, have significantly shaken market confidence in Carvana's future prospects.
See More
