Core Viewpoint - Carvana is expected to report first-quarter 2025 results with earnings estimated at 75 cents per share and revenues at $4.04 billion, reflecting a year-over-year revenue increase of 32% [1][2]. Financial Performance - The earnings estimate for Q1 2025 has increased by 2 cents over the past week, compared to a loss of 41 cents per share in the same quarter last year [2]. - The Zacks Consensus Estimate for 2025 revenues is projected at $17.20 billion, indicating a 25.8% year-over-year rise, while the EPS estimate is $3.67, suggesting a significant increase of 130.8% [4]. Sales and Growth - Carvana's used vehicle retail sales have returned to growth in Q1 2024, selling over 100,000 vehicles in each of the last three quarters of 2024, with a 50% year-over-year surge in retail units sold in Q4 2024 [6]. - The company anticipates a 32.6% year-over-year increase in retail units sold for Q1 2025, reaching approximately 121,868 vehicles [6]. Operational Efficiency - Carvana's adjusted EBITDA is estimated to rise by 85% year-over-year to $434.5 million for Q1 2025, driven by improved operational efficiency and cost-cutting measures [7]. - The company has streamlined operations through various initiatives, resulting in significant reductions in SG&A expenses [7]. Market Position and Valuation - Year-to-date, Carvana's shares have increased by 26%, outperforming competitors like CarMax and Sonic Automotive [8]. - Carvana trades at a forward 12-month P/S ratio of 2.97, significantly higher than CarMax (0.37) and Sonic Automotive (0.15), reflecting stronger growth expectations [11]. Strategic Initiatives - Carvana's turnaround strategy is yielding positive results, with a focus on achieving positive adjusted EBITDA and improved profitability per vehicle [14]. - The acquisition of ADESA's U.S. operations has strengthened Carvana's logistics and vehicle processing capabilities, positioning it for growth in a fragmented market [15]. Future Outlook - Despite economic challenges, Carvana's enhanced efficiency and strong fundamentals suggest a promising growth trajectory, with expectations of an earnings beat in the upcoming quarter [16].

Core Viewpoint - Carvana has experienced a significant recovery in its stock price since early 2023, rising over 5,000% from its lows in 2022, although it remains more than 30% below its all-time high [1][2]. Financial Recovery - Carvana faced severe financial challenges in 2022, with free cash flow reaching negative $3 billion annually due to overinvestment during a downturn in the automotive sector [4]. - The company implemented cost-cutting measures, including layoffs and reduced capital expenditures, which successfully returned it to a cash-flow-positive state by late 2023 [5]. - Revenue for 2024 grew by 27% to $13.7 billion, with a net income margin of 3% and positive free cash flow [6]. Growth Potential - In 2024, Carvana sold 416,000 vehicles, a 33% increase year-over-year, but this represents only about 1% of the 39 million used cars sold annually in the U.S. [8]. - The company has significant growth potential, as even selling 1 million to 5 million units annually would still be a small fraction of its total addressable market [9]. Valuation Considerations - Carvana's current market cap is $55 billion, with net debt of $4 billion, leading to an enterprise value of $59 billion [11]. - Management aims for adjusted EBITDA margins of at least 8%, but a more conservative estimate suggests a 5% net income margin could yield $685 million in net income based on current revenue [12][13]. - Future growth could see annual revenue surpassing $50 billion or even $100 billion if retail units sold increase significantly [13]. Investment Outlook - Much of the potential growth appears to be already priced into Carvana's stock, suggesting that it may be prudent to avoid adding the stock to investment portfolios at this time [14].

Core Viewpoint - Carvana (CVNA) is expected to report significant growth in quarterly earnings and revenues, with earnings per share projected at $0.73, a 278.1% increase year-over-year, and revenues forecasted at $4.04 billion, reflecting a 32% increase [1]. Earnings Projections - The consensus EPS estimate has been revised upward by 6.4% in the last 30 days, indicating analysts' reassessment of their initial projections [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts estimate 'Sales and operating revenues - Retail vehicle sales, net' to reach $2.88 billion, a year-over-year increase of 32.3% [5]. - 'Sales and operating revenues - Other sales and revenues' is expected to be $339.14 million, indicating a 48.1% year-over-year increase [5]. - The consensus for 'Sales and operating revenues - Wholesale sales and revenues' stands at $804.95 million, reflecting a 22.5% increase year-over-year [6]. Unit Sales and Profitability - Retail vehicle unit sales are projected to reach 129,401, up from 91,878 in the same quarter last year [6]. - The expected 'Per retail unit gross profit - Total' is $6,956.18, compared to $6,432 in the same quarter last year [6]. - 'Per retail unit gross profit - Retail vehicle' is estimated at $3,350.74, up from $3,080 year-over-year [7]. - 'Per retail unit gross profit - Wholesale' is projected at $851.09, slightly down from $860 in the previous year [7]. - 'Per retail unit gross profit - Other' is expected to be $2,732.90, compared to $2,492 last year [8]. Pricing and Market Metrics - The estimated 'Per unit selling prices - Retail vehicles' is $22,762.43, down from $23,673 year-over-year [9]. - 'Per unit selling prices - Wholesale vehicles' is forecasted to be $9,647.45, slightly up from $9,625 last year [9]. - The average prediction for 'Markets at end of period' is 316, unchanged from the same quarter last year [9]. Stock Performance - Carvana shares have increased by 38.6% over the past month, contrasting with a -0.5% change in the Zacks S&P 500 composite [10]. - With a Zacks Rank 2 (Buy), Carvana is expected to outperform the overall market in the near term [11].

Group 1 - Carvana (CVNA) stock has increased by 20% over the past year, outperforming the broader market [1] - The recent rally in Carvana's stock has led to bearish calls, indicating potential overheating [1] - The analysis is led by Moz Farooque, a seasoned market analyst known for uncovering under-the-radar stock and crypto opportunities [1]

Olivier Le Moal The following segment was excerpted from The Optimist Fund Q1 2025 Quarterly Letter. Top Contributors ThredUp (TDUP) As highlighted in our Q4 letter, ThredUp preannounced strong results in January, pointing to a meaningful acceleration in both revenue growth ...

Investment Rating - The report assigns an "Overweight" (OW) rating to General Motors (GM) and Ford, while Tesla and Rivian are rated "Underweight" (UW) [6][7]. Core Insights - The automotive industry is experiencing varied performance metrics across different companies, with GM and Ford showing potential upside in their stock prices, while Tesla and Rivian face significant downside risks [6][7]. - The report highlights the importance of valuation metrics such as EV/EBITDA, P/E ratios, and sales growth projections for assessing investment opportunities within the automotive sector [6][22]. Global Auto OEMs Investment Comparables - General Motors (GM) has a current price of $44.57 with a market cap of $43.067 billion and a target price of $53.00, indicating a 19% upside potential [6]. - Ford (F) is priced at $9.63 with a market cap of $38.294 billion and a target price of $11.00, representing a 14% upside [6]. - Ferrari (RACE) is valued at $439.97 with a target price of $460.00, showing a 5% upside [6]. - Tesla (TSLA) is currently priced at $241.37 with a target price of $120.00, indicating a -50% downside [6]. - Rivian (RIVN) has a price of $11.60 with a target price of $11.00, reflecting a -5% downside [6]. Global Auto Parts Suppliers Valuation Metrics - The average EV/EBITDA for US auto parts suppliers is projected at 1.8x for 2024, with a corresponding EBITDA margin of 12% [22]. - Aptiv (APTV) is rated "Overweight" with a current price of $51.71 and a target price of $102, indicating a 97% upside [22]. - Borg Warner (BWA) is rated "Overweight" with a price of $26.45 and a target price of $46, representing a 74% upside [22]. - Lear Corp (LEA) is rated "Overweight" with a price of $79.42 and a target price of $140, indicating a 76% upside [22]. Performance Metrics - The report indicates that the average revenue CAGR for US auto parts suppliers is projected to be 2% from 2023 to 2025 [74]. - The EBITDA margin for US auto parts suppliers is expected to be around 12% in 2025, with some companies showing higher margins [74][83]. - The report also highlights the financial returns of various suppliers, with some companies achieving significant returns on invested capital (ROIC) [54][56].

Core Viewpoint - Brokerage recommendations, particularly for Carvana (CVNA), suggest a favorable outlook, but reliance solely on these recommendations may not be prudent due to potential biases from brokerage firms [5][10]. Group 1: Brokerage Recommendations for Carvana - Carvana has an average brokerage recommendation (ABR) of 1.87, indicating a position between Strong Buy and Buy, based on 19 brokerage firms [2]. - Out of the 19 recommendations, nine are Strong Buy and three are Buy, accounting for 47.4% and 15.8% of total recommendations respectively [2]. Group 2: Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations often do not effectively guide investors towards stocks with the highest potential for price appreciation [5]. - Analysts from brokerage firms tend to exhibit a positive bias in their ratings due to vested interests, leading to a disproportionate number of favorable ratings compared to negative ones [6][10]. Group 3: Zacks Rank as an Alternative - Zacks Rank, a proprietary stock rating tool, categorizes stocks from Strong Buy to Strong Sell and is based on earnings estimate revisions, which have shown a strong correlation with near-term stock price movements [8][11]. - The Zacks Rank is updated more frequently than the ABR, making it a more timely indicator of future price movements [12]. Group 4: Carvana's Earnings Estimates - The Zacks Consensus Estimate for Carvana has increased by 5.8% over the past month to $3.58, reflecting analysts' growing optimism about the company's earnings prospects [13]. - This increase in consensus estimates has contributed to a Zacks Rank of 2 (Buy) for Carvana, suggesting a positive outlook for the stock [14].

Carvana (CVNA 7.33%) stock is surging higher Tuesday. The auto retail specialist's share price was up 9.3% as of 3:30 p.m. ET. Meanwhile, the S&P 500 was up 2%, and the Nasdaq Composite was up 2.3%.The stock market is recovering from yesterday's sell-off thanks to recent comments from U.S. Treasury Secretary Scott Bessent suggesting that the trade war between the U.S. and China could cool off in the not-too-distant future. Carvana stock is also seeing a big uptick in bullish trading thanks to positive analy ...

Carvana (CVNA) has staged a jaw-dropping comeback from once being on the verge of collapse. Year 2023 marked Carvana’s remarkable revival after a 98% plunge in 2022, and the rally continued in 2024 as well.  The used-car e-commerce player defied the odds, bouncing back through deep cost cuts and a debt overhaul—reviving investor interest in one of the pandemic era’s most dramatic stories.Over the past year, CVNA stock has rocketed 196%. In contrast, its closest competitor CarMax (KMX) declined 5% in the sam ...

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum, helping investors identify securities with high potential for market outperformance [2][3] Company Overview - Carvana Co. is a leading e-commerce platform for buying and selling used cars, with significant revenue growth, increasing approximately 16-fold from 2017 to 2024 [11] - The company has transformed traditional used-car sales through its comprehensive online business model, which includes sales, financing, logistics, and software development [11] Investment Ratings - Carvana holds a Zacks Rank of 2 (Buy) and a VGM Score of B, indicating strong potential for growth investors [12] - The company is forecasted to achieve year-over-year earnings growth of 118.9% for the current fiscal year, with upward revisions from six analysts in the last 60 days [12] - The Zacks Consensus Estimate for Carvana's earnings has increased by $0.51 to $3.48 per share, with an average earnings surprise of 119.2% [12][13]