Core Insights - Carvana's stock has experienced a remarkable recovery, rising from below $5 in late 2022 to nearly $472 in 2025, significantly outperforming the S&P 500's 17% increase and CarMax's 50% decline [2][3] Financial Performance - Carvana's revenue has grown at an average rate of 11.6% over the past three years, with a notable 46% increase from $13 billion to $18 billion in the last twelve months, and a 54.5% year-over-year growth to $5.6 billion in the latest quarter [7] - The company generated $1.7 billion in operating income over the past year, achieving an operating margin of 9.4%, which, while improved from previous losses, remains below the S&P 500's average of nearly 19% [8] - Operating cash flow was approximately $666 million, resulting in a cash flow margin of 3.6%, while net income of $629 million reflects a 3.4% net margin, indicating that Carvana is functional but not yet a margin leader [9] Valuation Metrics - Carvana's market capitalization exceeds $100 billion, with a price-to-sales ratio of around 2.9x, slightly below the S&P 500's 3.2x, but its price-to-earnings ratio is approximately 92 times, over three times the S&P 500's 23 [4][6] - The stock's valuation implies expectations of extremely strong and sustained profitability, with significant risks associated with any shortfall in performance [6] Financial Stability - Carvana has a debt total of $5.6 billion, resulting in a debt-to-equity ratio of roughly 5.5%, which is better than the S&P average, and a cash-to-assets ratio near 27%, significantly higher than the broader market's single-digit level [10] Market Behavior - The stock has shown high volatility, with a 99% decline during the inflation shock of 2022, compared to a 25% decline for the S&P 500, and a recovery period of 947 days, which is approximately double that of the index [11][12] - Carvana's stock tends to react sharply to earnings, projections, and operational updates, indicating a high-beta characteristic [13] Investment Considerations - Carvana's turnaround is genuine, and its inclusion in the S&P 500 adds credibility, but the current stock price reflects much of the anticipated growth, suggesting that investors are paying a premium for future performance [14]

Core Viewpoint - Carvana's stock has significantly rebounded from a low of single digits in December 2022 to $450, indicating strong recovery and potential for further value creation [1] Company Overview - Carvana operates as an e-commerce platform for buying and selling used cars, offering services such as vehicle acquisition, inspection, reconditioning, and financing options [3] Financial Performance - In Q3 2025, Carvana reported a revenue growth of 55% year-on-year, reaching $5.65 billion, with an adjusted EBITDA of $637 million, resulting in an adjusted EBITDA margin of 11.3% [4][6] - The stock has increased by 37% over the last six months, reflecting robust growth and improved fundamentals [4] Growth Targets - Carvana aims to sell 3 million cars annually within the next five to ten years, with estimates suggesting this target could be achieved by 2033 [5] - The company anticipates an increase in its adjusted EBITDA margin to 13.5% once its sales target is met, indicating expectations of healthy growth and margin expansion in the coming years [6]

Group 1 - The used-car dealer is gaining attention due to its upcoming inclusion in the S&P 500 on December 22 [1]

Group 1 - The online used-car retailer's stock has increased nearly 50% over a 12-day winning streak [1] - The company is aiming for an all-time high in its stock price [1]

Stock Performance - Carvana shares are on track for a record 12th straight session rally [1] Index Inclusion - Carvana is entering the S&P 500 Index this month [1]

Group 1: General Motors Co (NYSE: GM) - General Motors has been maintained with a Buy rating by Goldman Sachs analyst Mark Delaney, with the price target raised from $81 to $93 [6] - The stock gained approximately 9% over the past month, reaching a 52-week high of $77.35 [6] - The RSI value for GM is reported at 77.9, indicating it may be overbought [6] Group 2: Carvana Co (NYSE: CVNA) - Carvana is set to join the S&P 500 on December 22, which is a significant milestone for the company [6] - Evercore ISI Group analyst Michael Montani maintained an In-Line rating for Carvana and raised the price target from $395 to $420 [6] - The stock has surged around 42% over the past month, with a 52-week high of $458.64 and an RSI value of 78.6, suggesting it may also be overbought [6]

Group 1: Market Overview - As of December 10, 2025, two stocks in the consumer discretionary sector are signaling potential warnings for momentum-focused investors [1] - The Relative Strength Index (RSI) is a key momentum indicator, with values above 70 indicating that a stock may be overbought [2] Group 2: General Motors Co (NYSE:GM) - Goldman Sachs analyst Mark Delaney maintained a Buy rating for General Motors and raised the price target from $81 to $93 [6] - General Motors' stock has increased approximately 9% over the past month, reaching a 52-week high of $77.35 [6] - The current RSI value for General Motors is 77.9, with shares closing at $77.16, reflecting a 1.9% increase [6] Group 3: Carvana Co (NYSE:CVNA) - Carvana is set to join the S&P 500 on December 22, as announced on December 5 [6] - Evercore ISI Group analyst Michael Montani maintained an In-Line rating for Carvana and raised the price target from $395 to $420 [6] - Carvana's stock has surged around 42% over the past month, with a 52-week high of $458.64 [6] - The current RSI value for Carvana is 78.6, with shares closing at $456.33, also reflecting a 1.9% increase [6]

Core Insights - Carvana has reported its highest-ever quarterly revenue and strong per-vehicle gross profits, indicating a seemingly successful performance [1][4] - The demand for used cars remains robust, driven by high new vehicle prices and an aging average car fleet in the U.S. [2] Financial Performance - Carvana achieved a gross profit of $7,362 per vehicle sold during the last quarter, with $3,456 from dealer markup and over $3,000 from loan sales [4] - Operating cash flow decreased to $606 million in the first nine months of fiscal 2025, down from $858 million the previous year, primarily due to inventory reductions and losses on automobile loans [5] - The adjusted EBITDA margin fell from 11.7% to 11.3% year-over-year, indicating potential challenges in maintaining profitability despite a decrease in per-car selling costs [7] Market Context - The average sales price of new vehicles in the U.S. reached a record $50,080, leading to higher monthly payments and influencing consumer behavior towards used cars [2] - The current economic environment, characterized by high interest rates and limited new car supply, may be affecting Carvana's business model and profitability [11]

Core Viewpoint - Carvana's inclusion in the S&P 500 has significantly boosted its stock price and trading volume, reflecting improved operational efficiency and financial management [1][2]. Group 1: Stock Performance and Market Reaction - Carvana's shares rose by 12% on the announcement of its S&P 500 inclusion, contributing to a year-to-date gain of 125% [1]. - The trading volume on the day of the announcement reached 14 million shares, a notable increase from the average daily volume of 3.3 million shares [2]. - The stock has surged an extraordinary 9,540% since January 2023, indicating a strong recovery [1]. Group 2: Financial Metrics and Operational Improvements - Carvana's gross margin increased from 5% at the end of 2023 to nearly 20% in Q3 2025, showcasing improved profitability [5]. - Net debt has decreased from a peak of $8 billion at the end of 2023 to $3 billion, indicating better financial management [5]. - In Q3, Carvana sold approximately 156,000 retail units, a 44% year-over-year increase, with total revenue growing by 55% due to higher average unit selling prices [7]. Group 3: Future Outlook and Strategic Goals - CEO Ernest Garcia has set an ambitious target of selling 3 million vehicles over the next five to ten years, which he believes is achievable [7]. - The inclusion in the S&P 500 is expected to provide access to higher levels of institutional capital, reducing reliance on retail investors [4]. Group 4: Risks and Concerns - A significant portion of Carvana's customers are subprime borrowers, which raises concerns about potential defaults in an economic downturn [8]. - Insiders have sold $51 million worth of stock since November 1, raising questions about the stock's valuation [8]. - Growth in cash from operations has not kept pace with net income growth, indicating potential liquidity issues related to subprime loan receivables [9].

We recently published 10 Stocks Standing Tall Amid Market Fall; 6 Hit Record Highs. Carvana Co. (NYSE:CVNA) is one of the best performers on Monday. Carvana soared to a new all-time high on Monday after 10 consecutive days of rally, as investors took heart from its official inclusion in the S&P 500 index. At intra-day trading, Carvana Co. (NYSE:CVNA) jumped to its highest price of $456.97 before paring gains to end the day just up by 12.06 percent at $447.98 apiece. This followed the S&P Dow Jones Indic ...