How Close is Carvana to Reaching Its Long-Term Annual Sales Target?

Core Insights - Carvana Co. (CVNA) utilizes a technology-driven assembly-line process to recondition used vehicles, allowing efficient transformation into retail-ready inventory for direct delivery to customers [1] Company Goals and Performance - Carvana has set a long-term target of achieving 3 million vehicle sales annually, requiring an increase in production to approximately 90 units per week over the next 10 years, or 180 units per week for a 5-year goal, which the company considers attainable [2][10] - The company has increased its production capacity by an average of 80 units per week over the past year due to rising inventory levels and growing consumer demand [3] Market Position - The target of 3 million annual sales represents about 7.5% of the 40-million-unit U.S. used vehicle market, which is considered a modest share compared to leading players in comparable retail sectors [4] - Competitors like Group 1 Automotive and Lithia Motors have been expanding their geographical footprints to boost sales, although they have not set ambitious annual sales goals [5] Competitor Activities - Group 1 Automotive has acquired three U.S. dealerships, adding approximately $430 million in annualized revenues [6] - Lithia Motors has strengthened its presence in the southeastern U.S. through acquisitions expected to contribute around $400 million in annualized revenues [7] Financial Performance - Carvana's stock has outperformed the Zacks Internet – Commerce industry, with shares gaining 50.7% year to date compared to the industry's growth of 3.9% [8] - From a valuation perspective, Carvana appears overvalued with a forward price/sales ratio of 3.23, higher than the industry's 2.01 [12] Earnings Estimates - The Zacks Consensus Estimate for 2025 and 2026 EPS has increased by 36 cents and 5 cents, respectively, in the past 30 days [13]