Company Performance - Carvana's stock closed at $369.60, down 1.63%, underperforming the S&P 500 which gained 0.37% [1] - Over the last month, Carvana's shares increased by 1.85%, outperforming the Retail-Wholesale sector's gain of 0.38% but lagging behind the S&P 500's gain of 4.26% [1] Upcoming Earnings - Carvana is set to release its earnings on October 29, 2025, with an expected EPS of $1.29, representing a 101.56% increase year-over-year [2] - Revenue is anticipated to be $4.91 billion, indicating a 34.4% increase compared to the same quarter of the previous year [2] Full-Year Estimates - Zacks Consensus Estimates project Carvana's full-year earnings at $5.1 per share and revenue at $18.83 billion, reflecting year-over-year changes of +220.75% and +37.72% respectively [3] - Recent revisions to analyst forecasts for Carvana are important as they indicate short-term business trends and analyst sentiment [3] Valuation Metrics - Carvana has a Forward P/E ratio of 73.64, significantly higher than the industry average of 21.56 [5] - The company has a PEG ratio of 1.23, compared to the Internet - Commerce industry's average PEG ratio of 1.45 [6] Industry Ranking - The Internet - Commerce industry, part of the Retail-Wholesale sector, holds a Zacks Industry Rank of 44, placing it in the top 18% of over 250 industries [6] - The Zacks Rank system, which assesses industry groups based on the average Zacks Rank of individual stocks, shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - Recurve Capital reported a strong performance in Q2 2025, achieving a gross return of +31%, significantly outperforming the S&P 500's +10.6% and the Nasdaq's +17.8% [1] - Year-to-date, the fund has returned +14.8% gross and +12% net [1] Company Highlights - Carvana Co. (NYSE:CVNA) was highlighted as a key stock in Recurve Capital's portfolio, with a one-month return of 6.63% and a remarkable 123.45% increase in value over the past 52 weeks [2] - As of October 2, 2025, Carvana's stock closed at $394.71 per share, with a market capitalization of $46.16 billion [2] - Carvana Co. was noted as the largest contributor to Recurve's performance year-to-date, indicating a strong position within the fund [3] - The company has been a long-term holding for Recurve, becoming its largest position, and the decision to retain this investment has been beneficial for performance [3]

Core Insights - Carvana (CVNA) is positioned to potentially continue its earnings-beat streak in the upcoming report, having surpassed earnings estimates by an average of 58.85% in the last two quarters [1][2] Earnings Performance - In the last reported quarter, Carvana achieved earnings of $1.28 per share, exceeding the Zacks Consensus Estimate of $1.1 per share by 16.36% [2] - In the previous quarter, Carvana's earnings were $1.51 per share against an expected $0.75 per share, resulting in a surprise of 101.33% [2] Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Carvana, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [5][8] - The current Earnings ESP for Carvana is +12.34%, suggesting that analysts have recently become more optimistic about the company's earnings prospects [8] Zacks Rank and Success Rate - Carvana holds a Zacks Rank of 2 (Buy), which, when combined with a positive Earnings ESP, indicates a high probability of another earnings beat [8] - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% success rate in beating consensus estimates [6]

Core Viewpoint - Morgan Stanley has reduced its price target on CarMax shares but still sees potential for upside despite the competitive pressure from Carvana [1] Company Summary - CarMax's shares have been downgraded by Morgan Stanley, indicating a cautious outlook on the company's stock performance [1] - Despite the price target cut, Morgan Stanley believes that CarMax has opportunities for growth in the market [1] Industry Summary - The used car market is experiencing increased competition, particularly from Carvana, which poses challenges for CarMax [1] - The competitive landscape is evolving, and companies in the used car sector must adapt to maintain market share [1]

Economic Indicators - US MBA mortgage applications fell by -12.7% in the week ended September 26, with the purchase mortgage sub-index down -1.0% and the refinancing sub-index down -20.6% [1] - The September ISM manufacturing index rose +0.4 to a 7-month high of 49.1, exceeding expectations of 49.0 [6] - The September ADP employment change unexpectedly fell by -32,000, marking the largest decline in 2.5 years, while August was revised lower to -3,000 from +54,000 [5] Market Reactions - Stocks initially moved lower due to the US government shutdown, but later recovered, with the S&P 500 and Nasdaq 100 reaching new all-time highs [2][4] - The dollar index fell to a one-week low, while gold prices climbed to a record high amid risk-off sentiment [2] - Rising corporate earnings expectations are a bullish backdrop for stocks, with over 22% of S&P 500 companies providing guidance for Q3 earnings that are expected to beat analysts' expectations [8] Sector Performance - Pharmaceutical stocks rallied, with AstraZeneca closing up more than +9% and Eli Lilly up more than +8%, driven by hopes from Pfizer's deal with the US government [15] - Chipmakers and AI-infrastructure stocks also saw gains, with Super Micro Computer closing up more than +9% and Micron Technology up more than +8% [16] - Grocery retailers declined after Amazon announced a new private-label food brand, leading to Dollar Tree and Dollar General closing down more than -4% and -3% respectively [22] Upcoming Economic Data - Weekly initial unemployment claims are expected to increase by +7,000 to 225,000, and August factory orders are expected to rise by +1.4% month-over-month [9] - September nonfarm payrolls are anticipated to increase by +51,000, with the unemployment rate expected to remain unchanged at 4.3% [9]

Core Viewpoint - Carvana's stock has seen a significant increase, with shares up approximately 4.5%, indicating a recovery from previous lows where it lost almost all its value [1][2] Company Performance - Carvana has a market share of about 2%, while CarMax holds slightly over 3% [4] - CarMax reported a decline in same-store sales by 6.3% and a 1% drop in average retail selling price, contrasting with the overall increase in used car prices [3] Market Trends - The used car sector is facing challenges, with CarMax experiencing a notable 20% drop in stock price recently [2] - Tariffs are impacting the pricing of replacement parts, adding complexity to the used car market [5] Technical Analysis - Carvana's stock is currently above its moving averages, indicating a bullish trend, with notable resistance around the $390 mark [6] - Key support levels are identified near $355 and $370, which align with trend lines and moving averages [7] Options Activity - Options trading shows approximately 55,000 contracts, with about two-thirds being calls and one-third puts, indicating bullish sentiment [9] - A significant bullish trade was noted with 500 November 21st 360 strike calls executed at a debit of approximately $2.66 million [11]

Group 1 - ADP reported a surprise drop in private jobs, indicating potential shifts in the labor market [1] - Carvana's stock surged by 20%, surpassing its buy point as earnings soared, highlighting strong performance in the automotive sector [4] - Microsoft reached a market capitalization of $4 trillion, reflecting its significant growth and positioning in the tech industry [4] Group 2 - The stock market experienced fluctuations, with indexes swinging lower while Amazon's stock rose ahead of earnings [4] - Axon stock hit a record high, securing a spot on two best growth stock lists, indicating strong investor interest [4] - The IBD 50 and other top IBD screens featured Carvana as a leading prospect, showcasing its potential for growth [4]

Core Viewpoint - Carvana's stock has experienced significant growth, trading over $375 per share, up from below $4 in December 2022, following an upgrade from Jeffre [1][3][4] Company Performance - Carvana shares are currently trading at approximately $387.62, reflecting a 3% increase after the upgrade [3] - Jeffre upgraded Carvana from "buy" to "hold" with a new price target of $475, an increase of nearly 25% from the previous target of $385 [3][4] Market Position - Carvana currently holds about 2% of the U.S. used car market, indicating substantial room for growth as consumer preferences shift towards online purchasing [5][6][7] - A survey indicated that one-third of U.S. adults prefer to buy or sell vehicles online, supporting the belief that Carvana is well-positioned to capture more market share [6][7] Financial Projections - Jeffre raised its 2027 revenue and EBITDA estimates for Carvana by 15% and 12% above consensus estimates, respectively, based on consumer surveys and proprietary analysis [5] - The new price target implies a 28 times EV/EBITDA multiple on the 2027 estimates, reflecting a 25% premium to growth-adjusted multiples [5]

Nike - Nike reported better-than-expected earnings, with EPS at 49 cents, surpassing the street's expectation of 48 cents [2] - Revenue reached $11.7 billion, up 1% year-over-year, indicating a positive trend for the company [3] - Gross margins declined due to weaker demand and tariffs, with an expected annual impact of $1.5 billion from tariffs [4][7] - Wholesale sales increased, suggesting improved relationships with retail partners, while own stores and digital sales saw a decline [4][5] - North America sales rose by 4%, but there was weakness in the Chinese market [5] - The company is shifting focus back to running and training shoes, and collaborations, such as with Skims, are helping attract more female customers [6] Carvana - Carvana received an upgrade to a buy rating from Jeff, with a new price target of $475, indicating potential upside [8] - The company is well-positioned to benefit from the digital shift in used car sales, with about 30% of adults preferring to buy cars online [9][10] - Projections indicate that Carvana could capture 10% of the online car sales market, with revenue estimates for 2027 expected to be 15-12% above consensus [10][11] Marvell - Marvell was downgraded to a hold rating by TD Colin, with a reduced price target of $85, down from a previous target of $90 [13] - The downgrade follows a significant stock increase of over 30% in the past month, leading to a balanced risk-reward scenario [14] - Concerns exist regarding limited visibility on growth drivers, particularly custom chips, with expectations of flat revenue in 2026 [15]

Upgrades - Baird upgraded United Rentals (URI) to Outperform from Neutral with a price target of $1,050, up from $888, indicating stabilization in the rental industry after two years of deceleration [2] - Jefferies upgraded Sunrun (RUN) to Buy from Hold with a price target of $21, up from $11, expecting cash generation to materialize in the second half and strong growth through 2026 as U.S. Third-Party Owners gain market share [3] - HSBC upgraded Autodesk (ADSK) to Buy from Hold with a price target of $343, down from $388, noting Autodesk's potential to monetize artificial intelligence and likely margin expansion [4] - Jefferies upgraded Delta Air Lines (DAL) to Buy from Hold with a price target of $70, up from $62, citing a raised Q3 revenue outlook to 2%-4% from 0%-4% as a sign of confidence in topline growth for Q4 and 2026 [5] - Jefferies upgraded Carvana (CVNA) to Buy from Hold with a price target of $475, up from $385, based on consumer survey results and capacity analysis suggesting continued elevated growth [6] Downgrades - Northland double downgraded DraftKings (DKNG) to Underperform from Outperform with a price target of $33, down from $53, due to increasing headwinds from prediction markets [7] - RBC Capital downgraded GE Vernova (GEV) to Sector Perform from Outperform with a price target of $605, down from $631, as current valuations reflect strong demand and productivity improvements [7] - Evercore ISI downgraded Allstate (ALL) to In Line from Outperform with a price target of $233, up from $230, citing over-earning in auto insurance and limited scope for positive estimate revisions [7] - Goldman Sachs downgraded Doximity (DOCS) to Sell from Neutral with a price target of $64, up from $57, indicating the growth profile does not support the current valuation [7] - Goldman Sachs downgraded LivaNova (LIVN) to Neutral from Buy with a price target of $55, down from $56, due to decelerating sales growth and slowing margin expansion [7]