Carvana (US:CVNA) ZACKS·2025-07-28 17:06Core Insights - Carvana Co. is transforming the used car buying and selling process through a focus on selection, pricing, quality assurance, transparency, and a pressure-free experience [1] - The company leverages proprietary technology and a vertically integrated model to maintain a lower variable cost structure compared to traditional dealerships, enhancing customer value [1] E-commerce Trends - E-commerce has grown to approximately 18% of non-automotive retail transactions in 2023, with the automotive sector expected to increase its digital penetration as consumer comfort with online purchases rises [2] Market Opportunities - The fragmented used vehicle market presents significant growth opportunities for Carvana, which plans to utilize its e-commerce and logistics infrastructure to expand monetization through additional products and services [3] - The company aims to address various points in the car buying and ownership cycle, including vehicle service contracts and auto insurance, supported by its technological capabilities [3] Competitive Landscape - Unlike Carvana's exclusive online model, competitors like Group 1 Automotive and Lithia Motors integrate digital features into their traditional dealership networks [4] - Group 1's AcceleRide platform allows customers to purchase vehicles entirely online, while Lithia's Driveway platform offers a comprehensive vehicle ownership experience [5][6] Financial Performance - Carvana's stock has outperformed the Zacks Internet – Commerce industry, with a year-to-date share price increase of 63.3%, compared to the industry's 11.4% growth [7] - The company is currently trading at a forward price/sales ratio of 3.42, which is higher than the industry's 2.17, indicating a potentially overvalued position [10] Earnings Estimates - The Zacks Consensus Estimate for Carvana's EPS has increased by 5 cents for 2025 and 8 cents for 2026 over the past week, reflecting positive revisions in earnings expectations [11]