Why Is Carvana (CVNA) Down 3.3% Since Last Earnings Report?

Core Viewpoint - Carvana's recent earnings report indicates strong performance, with significant revenue and profit growth, raising questions about the sustainability of this trend leading up to the next earnings release [1][2]. Financial Performance - Carvana reported Q2 earnings of $1.28 per share, exceeding the Zacks Consensus Estimate of $1.10 and significantly up from 14 cents per share in the same quarter last year [2]. - Total revenues reached $4.84 billion, surpassing the Zacks Consensus Estimate by 5.62% and reflecting a 42% year-over-year increase [2]. - Total gross profit was $1.06 billion, a 49% increase year-over-year, with gross profit per unit (GPU) rising to $7,426 from $7,049 [3]. Segmental Performance - Retail vehicle sales totaled $3.41 billion, up 41.2% year-over-year, with the number of vehicles sold increasing to 143,280 [4]. - Wholesale vehicle sales reached $1.02 billion, a 42.2% year-over-year increase, with unit sales rising to 72,770 [5]. - Other sales and revenues grew by 47.3% year-over-year to $411 million, with GPU at $2,869 [6]. Financial Position - As of June 30, 2025, Carvana had cash and cash equivalents of $1.86 billion, up from $1.72 billion at the end of 2024, while long-term debt increased slightly to $5.32 billion [7]. Outlook - For Q3 2025, Carvana anticipates a sequential rise in retail unit sales and projects full-year adjusted EBITDA between $2 billion and $2.2 billion, up from $1.38 billion in 2024 [8]. - The consensus estimate for Carvana has shifted upward by 5.65% in the past month, indicating positive sentiment among investors [9]. Industry Context - Carvana operates within the Zacks Internet - Commerce industry, where another player, Booking Holdings, reported revenues of $6.8 billion, reflecting a 16% year-over-year increase [12].