Group 1: Industry Overview - U.S. President Trump is imposing 25% tariffs on imported cars and key auto parts, expected to disrupt the auto industry and strain supply chains, leading to higher vehicle prices and potential demand weakening [1] - The rising prices of new cars may drive consumers to the used car market, initially benefiting the used car industry before potential price increases occur [1] Group 2: CarMax Analysis - CarMax, the largest used vehicle retailer in the U.S., retailed 765,572 used vehicles in fiscal 2024, down over 5% year over year, with revenues declining from $20.9 billion to $20.3 billion in the first three quarters of fiscal 2025 [2][5] - The company is investing in strategic initiatives to enhance operations, including opening more offsite reconditioning and auction locations, and has seen a 50 basis points year-over-year improvement in retail used vehicle gross margin to 8.7% [3][2] - CarMax repurchased 4.3 million shares in the first three quarters of fiscal 2025, with $2.04 billion remaining under its buyback authorization, reflecting strong capital return policies [4] Group 3: CarMax Financial Concerns - CarMax's cash position of $271.9 million is overshadowed by $1.59 billion in long-term debt, resulting in a debt-to-capital ratio of 0.75, significantly above the auto sector's average of 0.34 [5] - Sales growth remains sluggish, prompting the company to push back its 2 million-unit sales target from 2026 to as late as 2030, with an overall gross margin of 10.5% lagging behind the industry average of 28% [5] Group 4: Carvana Analysis - Carvana, the second-largest used car retailer in the U.S., has seen retail sales volumes rise, selling over 100,000 cars in each of the last three reported quarters, with a 50% year-over-year increase in retail units sold in the final quarter of 2024 [7] - The company achieved record adjusted EBITDA of $1.4 billion in 2024, with a 10.1% adjusted EBITDA margin, and anticipates further gains in 2025 supported by cost efficiencies and operational improvements [8] Group 5: Carvana Operational Improvements - Carvana has reduced costs related to retail reconditioning and inbound transport by in-sourcing services and optimizing logistics, which has expanded its retail gross profit per unit [9] - The acquisition of ADESA's U.S. operations has enhanced Carvana's logistics and reconditioning processes, increasing its reconditioning capacity from 1.3 million to a potential 3 million units annually [10] Group 6: Carvana Financial Concerns - Carvana carries $5.26 billion in long-term debt against $1.72 billion in cash, with a debt-to-capital ratio of 0.8, posing financial risks despite a recent debt restructuring deal [11] Group 7: Price Performance and Valuation - Year to date, Carvana shares have risen more than 4%, while CarMax stock has lost 3.5% [12] - Carvana's forward sales multiple is 2.54X, significantly above its median of 0.69X, while CarMax's forward sales multiple sits at 0.45X, slightly above its median of 0.43X [15] Group 8: Growth Outlook - The Zacks Consensus Estimate for Carvana's 2025 sales and EPS implies year-over-year growth of 23% and 119%, respectively, while CarMax's fiscal 2026 sales and EPS estimates imply a year-over-year increase of 3.4% and 17% [14][16] - Carvana's superior growth trajectory, expanding margins, and strong sales momentum make it a more compelling investment choice compared to CarMax, which faces sluggish sales growth and lingering financial concerns [17][18]

With so much tariff-driven uncertainty on the horizon, smart investors are starting to think strategically as well as defensively. As it turns out, President Donald Trump wasn't bluffing about imposing tariffs on imported cars. On Wednesday the White House announced any carmaker looking to bring a new vehicle into the United States would be forking over an additional 25% of that automobile's value. This newest tariff is added to an already-lengthy list that includes several categories of industrial and cons ...

Company Performance - Carvana's stock closed at $203.95, reflecting a -0.45% change from the previous day's closing price, underperforming the S&P 500, which lost 0.33% [1] - Over the past month, Carvana's shares have decreased by 11.93%, while the Retail-Wholesale sector and the S&P 500 have lost 6.29% and 4.03%, respectively [1] Upcoming Earnings - The upcoming earnings release is highly anticipated, with projected EPS of $0.69, indicating a significant increase of 268.29% year-over-year [2] - Revenue is expected to reach $3.92 billion, representing a 27.93% increase compared to the same quarter last year [2] Full Year Projections - For the full year, earnings are projected at $3.49 per share and revenue at $16.86 billion, reflecting increases of 119.5% and 23.27% from the previous year [3] - Recent analyst estimate revisions indicate positive sentiment regarding Carvana's business and profitability [3] Zacks Rank and Valuation - Carvana currently holds a Zacks Rank of 2 (Buy), with a recent consensus EPS projection increase of 3.23% [5] - The company has a Forward P/E ratio of 58.77, which is significantly higher than the industry average of 22.68 [6] - Carvana's PEG ratio stands at 1.24, aligning with the Internet - Commerce industry's average PEG ratio [6] Industry Context - The Internet - Commerce industry, part of the Retail-Wholesale sector, ranks in the top 27% of all industries according to the Zacks Industry Rank [7] - The top 50% rated industries tend to outperform the bottom half by a factor of 2 to 1 [7]

I first heard of Carvana ( CVNA ) shortly after it became public in April 2017 because of its automated car vending machine , which I always thought was a bit gimmicky. The company became one of the biggest beneficiariesI have been a Merchant Seaman that has traveled the world for over 30 years. Within the last 15 years, I developed a very intense interest in investing. I learned a lot of what I know about investing from The MF. Also because I have a engineering background, I often tend to gravitate to Tech ...

This account is managed by Noah's Arc Capital Management. Our goal is provide Wall Street level insights to main street investors. Our research focus is mainly on 20th century stocks (old economy) undergoing a 21st century transformation, but occasionally we'll write on companies that help transform 20th century firms as well. We look for innovations in a business model that will cause a stock to change dramatically. Associated with SA contributor Elijah Buell.Analyst’s Disclosure: I/we have a beneficial lo ...

Carvana (CVNA -7.46%) has weathered unprecedented circumstances to find itself with an opportunity to take meaningful market share in the used car industry.*Stock prices used were the afternoon prices of March 24, 2025. The video was published on March 26, 2025. ...

Group 1 - The used car sales in 2024 increased by 2.2% to 15.9 million vehicles, marking the highest sales since 2019 [1] - The growth in used car sales is attributed to replenished inventories and rising demand for hybrid and electric vehicles [1]

Company Overview - BJ's Restaurants (BJRI) is part of the Retail-Wholesale group, which consists of 214 companies and is currently ranked 10 in the Zacks Sector Rank [2] - BJRI has a Zacks Rank of 1 (Strong Buy), indicating a positive earnings outlook based on earnings estimates and revisions [3] Performance Metrics - Over the past quarter, the Zacks Consensus Estimate for BJRI's full-year earnings has increased by 16.8%, reflecting improved analyst sentiment [4] - Year-to-date, BJRI has returned approximately 2.9%, outperforming the average loss of 0.8% in the Retail-Wholesale sector [4] Industry Context - BJ's Restaurants is categorized under the Retail - Restaurants industry, which includes 39 stocks and is currently ranked 174 in the Zacks Industry Rank [6] - The Retail - Restaurants industry has seen an average gain of about 1.5% year-to-date, indicating that BJRI is performing better than its industry peers [6] Future Outlook - Investors are encouraged to monitor BJ's Restaurants and Carvana, as both companies are expected to maintain solid performance in the Retail-Wholesale sector [7]

Core Insights - The article discusses the performance and outlook of global stocks, emphasizing the importance of thorough research and due diligence in investment decisions [1][2]. Group 1: Analyst Background - The analyst has been covering global stocks on Seeking Alpha since 2018 and has approximately a decade of personal and professional investment experience across major equity markets [1]. Group 2: Disclosure and Independence - The analyst has no current stock, option, or similar derivative positions in any of the companies mentioned and does not plan to initiate any such positions within the next 72 hours [2]. - The article expresses the analyst's own opinions and is not receiving compensation from any company mentioned, aside from Seeking Alpha [2]. Group 3: Research Integrity - All research, figures, and interpretations are provided on a best effort basis and may be subject to error, highlighting the need for individual due diligence [3].

Group 1: Analyst Recommendations - Carvana currently has an average brokerage recommendation (ABR) of 1.95, indicating a position between Strong Buy and Buy, based on recommendations from 19 brokerage firms [2] - Of the 19 recommendations, nine are Strong Buy and two are Buy, accounting for 47.4% and 10.5% of all recommendations respectively [2] - Despite the positive ABR, relying solely on this information for investment decisions may not be advisable, as studies show brokerage recommendations often lack success in guiding investors towards stocks with high price appreciation potential [3][4] Group 2: Limitations of Brokerage Recommendations - Brokerage firms often exhibit a strong positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [4][5] - The interests of brokerage firms may not align with those of retail investors, providing limited insight into future stock price movements [5][8] - Analysts' recommendations tend to be overly optimistic, misleading investors more frequently than guiding them accurately [8] Group 3: Zacks Rank as an Alternative - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, providing a more effective indicator of near-term stock price performance compared to ABR [6][9] - The Zacks Rank is timely and reflects changes in earnings estimates quickly, unlike the ABR which may not be up-to-date [10] - For Carvana, the Zacks Consensus Estimate for the current year has increased by 21.4% over the past month, indicating growing optimism among analysts regarding the company's earnings prospects [11] Group 4: Investment Implications for Carvana - The recent change in the consensus estimate, along with other factors, has resulted in a Zacks Rank 2 (Buy) for Carvana, suggesting a favorable outlook for the stock [12] - The Buy-equivalent ABR for Carvana may serve as a useful guide for investors, complementing the insights provided by the Zacks Rank [12]