Carvana (NYSE:CVNA) gained in trading on Wednesday after the used car retailer announced new features that will make it easier for customers to shop for and buy a used electric vehicle (EV) or plug-in hybrid (PHEV). The streamlined process will let buyers apply for tax-credit savings at checkout.
Vehicles that qualify for the Clean Vehicle Tax Credit will allow eligible customers to apply for tax credit savings of up to $4,000 at checkout. The company’s automated system will now check vehicle eligibility and apply the Clean Vehicle Tax Credit at checkout for eligible customers.
Needham Analyst Upgrades CVNA
Following the news, Needham analyst Chris Pierce upgraded the stock to a Buy from a Hold and raised the price target to $160—the highest price target on the Street. The analyst believes Carvana can grow unit sales and market share by leveraging its digital-first customer experience and “under-utilized” physical locations.
The analyst sees Carvana as becoming a “profitable secular growth story” with rising retail unit sales and improving profit per unit. Pierce’s price target implies an upside potential of 20.1% from current levels.
According to TipRanks’ “Bulls Say, Bears Say,” analysts bullish on CVNA believe that the retailer’s competitive moat is widening in the “in the used car space, with operating leaders well aligned on importance of continuous improvement, and more importantly, long-term vision and culture.”
Is CVNA a Good Stock to Buy?
Analysts remain sidelined about CVNA stock, with a Hold consensus rating based on three Buys, 12 Holds, and one Sell. Over the past year, CVNA has skyrocketed by more than 200%, and the average CVNA price target of $111 implies a downside potential of 16.7% from current levels.
