Will Carvana Extend Its Streak of Record Retail Sales in Q2?

Core Insights - Carvana Co. (CVNA) achieved record retail unit sales of 133,898 in Q1 2025, reflecting a 46% year-over-year increase and contributing to quarterly revenues of $4.23 billion, up 38% year-over-year [1][9] - The company anticipates continued growth in retail unit sales for Q2 2025, aiming for an annual target of 3 million retail unit sales within the next five to ten years [3][9] - Carvana's competitive positioning is strengthened by the expectation that higher tariffs on new vehicles will favor the used vehicle market, aligning with its business model [2][9] Company Performance - In Q1 2025, Carvana's retail unit sales growth outpaced competitors, with Lithia Motors and Group 1 Automotive also reporting increases in retail unit sales [4] - Lithia's retail new and used vehicle sales reached 91,990 and 107,326 units, respectively, marking year-over-year increases of 7.4% and 4.8% [5] - Group 1's retail new and used vehicle sales totaled 56,099 and 59,618 units, reflecting year-over-year improvements of 26.6% and 21.2% [6] Market Positioning - Carvana's stock has outperformed the Zacks Internet – Commerce industry, with shares gaining 51.4% year-to-date compared to the industry's 4.2% growth [7] - The company is currently trading at a forward price/sales ratio of 3.28, which is higher than the industry's ratio of 1.98, indicating a potentially overvalued position [11]