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Carvana (CVNA)
:CVNA
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Carvana Co
(NYSE:CVNA)
70Outperform
Positive Factors
Market Position
Analysts maintain a Buy rating for Carvana, expecting share gains as auto sales shift from new to used vehicles.
Profitability
Carvana's efficiency improvements are believed to support greater profitability.
Sales Growth
Proprietary tracking of retail unit sales on Carvana.com suggests 1Q retail unit sales of 134K units, which is a 46% increase year-over-year.
Negative Factors
Cost Increases
The new tariffs on auto parts could increase Carvana's costs per unit, but this might be offset by higher vehicle prices.
Credit Exposure
Carvana remains more exposed to a lower strata of auto credit relative to the rest of our auto coverage.
Macroeconomic Concerns
There is potential concern for a slowdown in demand or impact to auto-financing due to increasing macro uncertainty following the announced tariffs.
Carvana Co (CVNA) vs. S&P 500 (SPY)
Market Cap
$35.83B
Dividend YieldN/A
Average Volume (3M)5.50M
Price to Earnings (P/E)112.1
Beta (1Y)3.27
Revenue Growth26.94%
EPS Growth-57.88%
CountryUS
Employees17,400
SectorConsumer Cyclical
Sector Strength60
IndustrySpecialty Retail
Share Statistics
EPS (TTM)1.57
Shares Outstanding134,342,670
10 Day Avg. Volume5,963,333
30 Day Avg. Volume5,496,030
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.98
Price to Cash Flow (P/CF)169.60
P/FCF Ratio116.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$276.79Price Target Upside56.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Carvana Co Business Overview & Revenue Model
Company DescriptionCarvana Co., together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. The company's platform allows customers to research and identify a vehicle; inspect it using company's 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up from their desktop or mobile devices. Carvana Co. was founded in 2012 and is headquartered in Tempe, Arizona.
How the Company Makes MoneyCarvana makes money primarily through the sale of used vehicles, which constitutes the core of its revenue model. The company purchases used cars from auctions, customers, and other sources, reconditions them at its inspection centers, and then sells them online at a markup. In addition to vehicle sales, Carvana generates revenue through associated financing and warranty services, offering customers auto loans and extended service contracts. The company's partnerships with financial institutions and warranty providers enable these additional revenue streams. Carvana also benefits from its vertically integrated model, which includes its own logistics network to manage vehicle transportation and delivery, further enhancing operational efficiencies and profitability.
Carvana Co Financial Statement Overview
Summary
Carvana Co's financial performance in 2024 demonstrates significant improvements in revenue, profitability, and cash flow metrics, indicating a strong operational turnaround. The income statement reveals enhanced margins and revenue growth, while the balance sheet shows improved leverage and return on equity. Cash flow statements reflect robust cash generation and liquidity. Despite these positive trends, potential risks include historical profit volatility and a lower equity base.Income Statement
Carvana Co has shown strong revenue growth with a notable increase from $10.77 billion in 2023 to $13.67 billion in 2024, reflecting a robust revenue growth rate of approximately 27.0%. Gross Profit Margin improved significantly to 21.0% in 2024, compared to previous years, indicating enhanced efficiency in cost management. The Net Profit Margin turned positive at 1.54%, marking a significant turnaround from prior losses. Both EBIT and EBITDA margins are positive, highlighting operational improvements. However, the company has a history of fluctuating profitability, which presents a potential risk.75
Positive
Balance Sheet
The company's financial structure shows a reasonable Debt-to-Equity Ratio of 0.57, reflecting moderate leverage, which has improved from previous years. The Return on Equity (ROE) is positive at 16.67%, indicating effective utilization of equity. However, the Equity Ratio stands at 14.85%, suggesting a lower equity base relative to total assets, which may indicate potential financial vulnerability in downturns.60
Neutral
Cash Flow
Carvana has demonstrated strong cash flow management with a positive Operating Cash Flow to Net Income Ratio of 4.37, indicating efficient conversion of net income into cash. The Free Cash Flow grew from $716 million in 2023 to $827 million in 2024, showing a healthy Free Cash Flow Growth Rate of 15.5%. The Free Cash Flow to Net Income Ratio is 3.94, highlighting strong cash generation relative to net income. These metrics underscore the company's improved liquidity and operational cash generation capabilities.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 13.67B | 10.77B | 13.60B | 12.81B | 5.59B | Gross Profit |
| 2.88B | 1.72B | 1.25B | 1.93B | 793.76M | EBIT |
| 990.00M | -72.00M | -1.56B | -110.00M | -330.95M | EBITDA |
| 1.36B | 1.16B | -2.15B | -5.00M | -257.16M | Net Income Common Stockholders |
| 210.00M | 450.00M | -2.89B | -287.00M | -462.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.18B | 896.00M | 434.00M | 403.00M | 300.81M | Total Assets |
| 8.48B | 7.07B | 8.70B | 7.01B | 3.03B | Total Debt |
| 723.00M | 6.71B | 8.82B | 5.77B | 1.87B | Net Debt |
| -993.00M | 6.18B | 8.38B | 5.37B | 1.57B | Total Liabilities |
| 7.11B | 7.46B | 9.75B | 6.49B | 2.23B | Stockholders Equity |
| 1.26B | 243.00M | -518.00M | 306.00M | 387.60M |
| Cash Flow | Free Cash Flow | |||
| 827.00M | 716.00M | -1.84B | -3.15B | -968.41M | Operating Cash Flow |
| 918.00M | 803.00M | -1.32B | -2.59B | -608.41M | Investing Cash Flow |
| -13.00M | 31.00M | -2.58B | -627.00M | -345.93M | Financing Cash Flow |
| 261.00M | -868.00M | 3.90B | 3.53B | 1.16B |
Carvana Co Technical Analysis
Negative
176.32
Price Trends
219.79
Negative
226.43
Negative
193.59
Negative
Market Momentum
-3.11
Negative
52.89
Neutral
71.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVNA, the sentiment is Negative. The current price of 176.32 is below the 20-day moving average (MA) of 190.88, below the 50-day MA of 219.79, and below the 200-day MA of 193.59, indicating a bearish trend. The MACD of -3.11 indicates Negative momentum. The RSI at 52.89 is Neutral, neither overbought nor oversold. The STOCH value of 71.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CVNA.
Carvana Co Risk Analysis
Carvana Co disclosed 41 risk factors in its most recent earnings report. Carvana Co reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Carvana Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $61.11B | 23.33 | -14.95% | ― | 4.72% | 4.69% | |
70 Outperform | $79.56B | 32.80 | -174.09% | ― | 5.67% | 5.40% | |
70 Outperform | $35.83B | 112.14 | 27.94% | ― | 26.94% | -57.88% | |
68 Neutral | $15.31B | 17.05 | 20.69% | 3.65% | 1.71% | -30.78% | |
59 Neutral | $10.97B | 9.83 | -1.56% | 4.06% | 1.31% | -16.49% | |
46 Neutral | $51.19M | ― | -41.01% | ― | -12.86% | -386.01% | |
45 Neutral | $2.09B | 59.62 | -23.45% | 3.08% | -9.34% | -852.37% |
* Consumer Cyclical Sector Average
Performance Comparison
CVNA
Carvana Co
176.32
92.64
110.71%
AAP
Advance Auto Parts
30.31
-46.64
-60.61%
AZO
AutoZone
3,499.08
455.46
14.96%
GPC
Genuine Parts Company
105.54
-40.43
-27.70%
ORLY
O'Reilly Auto
1,315.20
219.46
20.03%
PRTS
CarParts.com Inc
0.82
-0.77
-48.43%
Carvana Co Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -37.44% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
Carvana's earnings call highlighted a year of record-breaking profitability and growth, driven by improved operational efficiency and strategic expansion of inspection capacity. Despite a decline in wholesale GPU and some non-recurring expenses, the overall financial performance and strategic outlook were overwhelmingly positive.Highlights
Record-Breaking Profitability and Growth
Carvana became the most profitable public automotive retailer in U.S. history as measured by adjusted EBITDA margin, achieving a 33% year-over-year growth rate in FY 2024 retail units sold, outpacing the industry.
Expansion of Inspection Capacity
Successfully integrated six of the 56 ADESA mega sites in 2024, with plans to open approximately 10 more, expanding capacity for 3 million retail units, eight times the current volume.
Strong Financial Performance in Q4
Set new fourth-quarter records for retail units sold (114,379), adjusted EBITDA ($359 million), and adjusted EBITDA margin (10.1%), with a significant revenue increase of 46% to $3.547 billion.
Improved Operational Efficiency
Achieved a $1,165 reduction in non-GAAP SG&A expenses per retail unit sold and lowered operations expense to $1,696 per retail unit, driven by operational efficiency initiatives.
Positive Financial Metrics
GAAP operating income of $260 million and net income of $404 million in Q4, with a significant increase in cash and committed liquidity resources to $3.6 billion, a $2 billion increase year-over-year.
Lowlights
Decline in Wholesale GPU
Non-GAAP wholesale GPU decreased by 24%, primarily driven by faster growth in retail units than wholesale vehicle and wholesale marketplace units.
One-time Non-recurring Expenses
Incurred a non-recurring thank you bonus of just shy of $9 million in Q4, contributing to a $9 million increase in overhead expenses.
Company Guidance
During Carvana's Fourth Quarter 2024 Earnings Conference Call, the company provided impressive guidance, highlighting significant financial achievements and future growth prospects. Carvana reported a record adjusted EBITDA of $1.38 billion with an adjusted EBITDA margin of 10.1% for the year, marking it as the most profitable public automotive retailer in U.S. history. The company also achieved a net income of $404 million, a net income margin of 3.1%, and a GAAP operating income of $990 million. Retail units sold increased by 33% year-over-year, with Q4 units at 114,379 reflecting a 50% year-over-year growth. Carvana plans to open approximately 10 new mega sites in 2025, aiming for substantial capacity expansion to support its rapid growth. The company is focused on maintaining strong profitability while scaling operations to capture more market share, leveraging its unique business model and operational efficiencies. Carvana also anticipates significant growth in retail units sold and adjusted EBITDA in 2025, with a sequential increase expected in Q1 2025, underscoring its commitment to long-term profitable growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.