Shares of Carvana (CVNA) have been strong performers lately, with the stock up 20.4% over the past month. The stock hit a new 52-week high of $292.84 in the previous session. Carvana has gained 38.6% since the start of the year compared to the 8.4% move for the Zacks Retail-Wholesale sector and the 9.5% return for the Zacks Internet - Commerce industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of ...

Used car e-retailer Carvana (CVNA) reported fourth-quarter earnings of 56 cents per share, which breezed past the Zacks Consensus Estimate of 24 cents and the year-ago quarter’s loss of $1 per share. Better-than-expected volumes and gross profits from wholesale vehicle sales led to the outperformance. Revenues of $3.55 billion beat the Zacks Consensus Estimate of $3.33 billion and rose 46.3% year over year.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Key HighlightsTotal gross profi ...

Financial Data and Key Metrics Changes - In 2024, Carvana achieved an adjusted EBITDA of $1.38 billion, with an adjusted EBITDA margin of 10.1%, marking it as the most profitable public automotive retailer in U.S. history [20][29] - The company reported a net income of $404 million and a net income margin of 3.1% for the year [20][29] - For Q4 2024, retail units sold totaled 114,379, a 50% increase year-over-year, with revenue reaching $3.547 billion, up 46% [21][22] Business Line Data and Key Metrics Changes - Non-GAAP retail GPU was $3,331, an increase of $361 year-over-year, driven by lower retail depreciation rates and reduced reconditioning costs [23] - Non-GAAP wholesale GPU decreased by 24% to $8.57, attributed to faster growth in retail units compared to wholesale units [24] - Non-GAAP other GPU increased to $2,728, up $849, due to higher spreads between origination interest rates and benchmark rates [25] Market Data and Key Metrics Changes - Carvana holds a 1% nationwide market share, with the largest competitor at 2% and the top 100 competitors combined at 10% [8][12] - The company integrated six of the 56 ADESA sites in 2024, with plans to open approximately 10 more mega sites in 2025 [10] Company Strategy and Development Direction - Carvana aims to leverage its unique business model to scale operations, targeting a capacity of approximately 3 million retail units through the integration of ADESA mega sites [9][10] - The company focuses on enhancing customer experience and operational efficiency, with plans to continue improving inventory selection and brand awareness [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving significant growth in both retail units sold and adjusted EBITDA in 2025, assuming a stable environment [31] - The company is committed to deleveraging its balance sheet while maintaining a strong liquidity position, with over $1.7 billion in cash and $3.6 billion in committed liquidity resources at the end of 2024 [30] Other Important Information - Carvana's operational efficiency initiatives led to a $1,165 reduction in non-GAAP SG&A expenses per retail unit sold [26] - The company plans to continue investing in inventory to drive customer satisfaction and conversion rates [39] Q&A Session Summary Question: Inventory management and customer experience improvements - Management emphasized the importance of selection in driving customer satisfaction and conversion, indicating a preference for increasing inventory despite potential depreciation risks [36][39] Question: GPU and margin drivers - Management noted that there are still fundamental gains to be achieved in GPU, with expectations for operational efficiencies to drive margins higher [58][60] Question: Loan sales strategy - The company plans to maintain a diversified funding strategy for loan sales, combining whole loan sales and securitization [75] Question: Credit rating improvement - Management highlighted the importance of strong financial metrics to improve credit ratings, with a focus on reducing net debt to adjusted EBITDA [84] Question: Growth capacity limitations - Management identified reconditioning capacity and operational execution as key factors limiting growth, with plans to scale operations effectively [88][89] Question: Market expansion and unit growth - Management indicated that future growth will primarily come from taking market share in existing markets rather than expanding into new ones [95][96]

For the quarter ended December 2024, Carvana (CVNA) reported revenue of $3.55 billion, up 46.3% over the same period last year. EPS came in at $0.56, compared to -$1.00 in the year-ago quarter.The reported revenue represents a surprise of +6.65% over the Zacks Consensus Estimate of $3.33 billion. With the consensus EPS estimate being $0.24, the EPS surprise was +133.33%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street exp ...

Core Insights - Carvana (CVNA) reported quarterly earnings of $0.56 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, and a significant improvement from a loss of $1 per share a year ago, representing an earnings surprise of 133.33% [1] - The company achieved revenues of $3.55 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 6.65% and showing a year-over-year increase from $2.42 billion [2] - Carvana has consistently outperformed consensus EPS estimates over the last four quarters, indicating strong financial performance [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.66 on revenues of $3.76 billion, and for the current fiscal year, it is $2.85 on revenues of $16.24 billion [7] - The estimate revisions trend for Carvana is favorable, contributing to a Zacks Rank 1 (Strong Buy) for the stock, suggesting expected outperformance in the near future [6] Industry Context - The Internet - Commerce industry, to which Carvana belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable environment for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Wednesday, February 19, 2025Market indexes fought back and closed in the green for today’s trading session — all but the small-cap Russell 2000, which also improved but didn’t quite make it into positive territory. The S&P 500 set its second-straight record closing high, at 6144, but ultimately today’s gains were modest.The Dow closed up +71 points, or +0.16% on the day. The S&P 500 grew +14 points, +0.24%. The Nasdaq added almost +15 points, +0.075%, while the Russell 2000 was -7.9 points for the session, ...

Carvana (CVNA) Q4 2024 Earnings Call February 19, 2025 05:30 PM ET Company Participants Meg Kehan - Senior Director, Capital Markets & Investor RelationsErnie Garcia - President, Chief Executive Officer and ChairmanMark Jenkins - CFORonald Josey - Managing DirectorDaniela Haigian - Vice President - Equity ResearchMichael Montani - Managing DirectorRajat Gupta - Executive Director, AutosSeth Basham - MD - Equity ResearchJeff Lick - Managing Director & Equity Research - Consumer & Auto EcosystemMarvin Fong - ...

Carvana reported better-than-expected earnings, posting record profitability and significant sales growth in Q4 2024.Carvana (CVNA -0.95%), a leading e-commerce platform for buying and selling cars, has released its earnings for the fourth quarter of 2024, detailed on February 19, 2025. The highlight of the quarter was the company's performance on key financial metrics, exceeding analyst expectations. Diluted earnings per share (EPS) reached $0.56, far above the predicted $0.31. Additionally, revenue increa ...

Carvana topped Wall Street's top- and bottom-line expectations for the fourth quarter, while guiding for another "strong" year in 2025.Carvana, as it has in the past, gave a broad guidance outlook for this year that includes growth in both retail units sold and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), including sequential increases in both during the first quarter.Here's how the company performed in the fourth quarter, compared with average estimates compiled by LSEG ...

Financial Condition and Capital Structure - The company may need to engage in equity or debt financings to secure additional capital, but future financing may not be available on acceptable terms [89]. - Access to capital markets is crucial for the company, and any decline in funding availability could harm liquidity and financial condition [139]. - The company is obligated to make cash payments to LLC Unitholders under the Tax Receivable Agreement, which could amount to 85% of the tax benefits realized, potentially resulting in substantial cash outflows [153][156]. - The company may incur additional debt in the future, which could further strain financial flexibility and increase risks associated with existing indebtedness [162][163]. - The company may face liquidity issues if cash flows are insufficient to meet debt service obligations, potentially leading to asset sales or restructuring [165][166]. - The company does not intend to pay dividends on its Class A common stock for the foreseeable future, making returns dependent solely on stock price appreciation [169]. - The company had total outstanding debt of $67 million under short-term revolving facilities at December 31, 2024, with a variable interest rate that could change annual interest expense by $1 million for a 100-basis point change in market interest rates [331]. - Interest expense increased by $19 million to $651 million for the year ended December 31, 2024, compared to $632 million for the year ended December 31, 2023, primarily due to increased interest associated with Senior Secured Notes [331]. - The company may issue additional shares of Class A common stock, which could dilute existing stockholder ownership and potentially lower stock prices [174]. - The company is classified as a "controlled company," which allows it to qualify for exemptions from certain corporate governance requirements, potentially affecting stockholder protections [160]. - The Garcia Parties control approximately 84% of the voting power of the company's outstanding capital stock as of December 31, 2024, allowing them to effectively control business operations [170]. - The Garcia Parties can determine the outcome of all matters requiring stockholder approval, which may not align with the interests of other stockholders [172]. - The company has authorized undesignated preferred stock, which could complicate acquisition efforts and affect the market price of Class A common stock [176]. Operational Risks and Challenges - The company has experienced rapid growth historically, but future growth may not be sustainable without a healthy industry and macroeconomic environment [90]. - Significant demands on management and operational resources may arise from continued rapid growth, impacting profitability and customer experience [91]. - Maintaining reputation and customer service quality is critical; any decline could adversely affect consumer trust and sales [92]. - Quarterly and annual operating results may fluctuate due to seasonal car-buying patterns, with sales typically peaking in the first quarter [93]. - A significant portion of expenses are fixed, making period-to-period comparisons of operating results potentially misleading [94]. - The used car marketplace is highly competitive, with pressure from both existing and new companies affecting business operations [96]. - Changes in prices for new and used vehicles could materially impact revenues and results of operations [103]. - The company operates in highly regulated industries, and changes in laws and regulations could adversely affect business and financial condition [108]. - The company is subject to various dealer and finance licensing regulations, which could lead to economic fines or operational restrictions if not adhered to [109]. - The company faces potential legal and monetary liabilities related to the Telephone Consumer Protection Act (TCPA), which could impact customer attraction efforts [110]. - Environmental and transportation regulations, such as the California Zero Emission Vehicle program, may increase operating expenses for the company [112]. - The reliance on internal and external logistics exposes the company to various risks, including rising transportation costs and regulatory compliance challenges [116]. - The company collects and processes sensitive personal information, and any failure to protect this data could harm its reputation and financial results [117]. - Cybersecurity measures are critical for the company, as breaches could disrupt operations and negatively impact financial performance [120]. - The company’s technology infrastructure is hosted in third-party data centers, making it vulnerable to various risks that could impair operations [123]. - Inadequate insurance coverage for inventory and auto liability could adversely affect the company's financial condition and operational capabilities [127]. - The company’s success is heavily dependent on retaining key personnel, and the loss of such employees could significantly hinder business growth [128]. - The company holds shares of Series A convertible preferred stock and warrants in Root, Inc., but as a minority investor, it has limited influence over Root's business operations and may not realize expected benefits from this investment [129]. - The company has previously acquired complementary businesses and technologies, including a wholesale marketplace, but future acquisitions may divert management's attention and disrupt operations [130]. - Risks associated with acquisitions include potential dilution of stockholder equity, unanticipated liabilities, and integration challenges that could adversely affect financial condition [131]. - The company relies on automotive finance receivables for a substantial portion of gross profit, and any decline in sales or pricing of these receivables could significantly impact profitability [137]. - The company assesses customer creditworthiness using proprietary technology, and inaccuracies in data could lead to originating underperforming automotive finance receivables [138]. - Errors in customer contracts could render them unenforceable, potentially leading to significant financial repercussions [141]. - The company is dependent on distributions from Carvana Group to meet tax obligations and debt payments, and any restrictions on these distributions could adversely affect liquidity [148]. - The company may face legal proceedings that could result in substantial monetary damages and affect business operations [133]. - Changes in accounting policies or estimates could materially impact reported financial results and condition [135]. Market and Economic Factors - The company is exposed to inflationary factors affecting vehicle affordability and supply chain costs, although it does not believe inflation has historically had a material effect on its financial condition [334]. - The company plans to expand its online sales platform to include additional complementary products and services, which may involve significant investment and risks [115]. - Future tax benefits from exchanges of LLC Units for Class A common stock may not be fully realized due to changes in tax laws and insufficient taxable income [159]. - The market price of the company's Class A common stock has fluctuated between $41.00 and $260.80 from January 1, 2024, to January 1, 2025, indicating significant volatility [169]. - A 100-basis point increase or decrease in market interest rates would result in a change to annual interest expense of $1 million [331]. - The company has fixed interest rates on long-term debt, minimizing associated risks from changes in market rates [332]. - The company's amended and restated certificate of incorporation includes provisions that may discourage third-party acquisitions and affect stockholder rights [179].