Can Carvana's Same-Day Delivery Fuel Profits and Market Share?

Core Insights - Carvana (CVNA) is transforming the car buying and selling process with its same-day delivery service, which has expanded to over 15 states, including major markets like Chicago and Denver [1][8] - The U.S. used-car market is valued at $1.9 trillion, and Carvana's rapid service differentiates it from traditional dealers, who typically take several days to complete a sale [2] - The company's integrated logistics and reconditioning network enhances scalability, reduces delivery costs, and strengthens its competitive position [4] Performance Metrics - In Q2, Carvana reported a 41% increase in retail unit sales and achieved record adjusted EBITDA margins of 12.4% [6][8] - The expansion into metropolitan areas significantly increases Carvana's addressable market and captures share from traditional dealers [5] Market Position - Carvana's stock has risen 12% over the past three months, outperforming competitors like CarMax and Lithia Motors, which saw declines of over 8% and 0.2% respectively [7] - Despite its growth, Carvana is considered overvalued with a forward price/sales ratio of 3.3, compared to CarMax and Lithia Motors at 0.31X and 0.2X respectively [10]