Are Wall Street Analysts Predicting Carvana Stock Will Climb or Sink?

Company Overview - Carvana Co. (CVNA) has a market capitalization of $89.5 billion and operates an online platform for buying and selling used cars, providing services such as vehicle acquisition, inspection, reconditioning, financing, logistics, and post-sale customer support [1] Stock Performance - Over the past 52 weeks, CVNA shares have increased by 53.8%, outperforming the S&P 500 Index, which rose by 15.6%. However, on a year-to-date basis, CVNA shares are down 2.4%, while the S&P 500 has increased by 1.7% [2] - CVNA has also outperformed the State Street Consumer Discretionary Select Sector SPDR ETF (XLY), which rose by 4.1% over the same period [3] Financial Performance - In Q3 2025, Carvana reported revenue of $5.65 billion, exceeding expectations. However, shares fell by 13.8% the following day due to disappointing earnings, with profit of $1.03 per share missing Wall Street estimates and adjusted EBITDA margin declining to 11.3% [4] - Management's forward guidance projected Q4 retail unit sales just above 150,000, indicating a potential 4% quarter-on-quarter decline and a slowdown in year-on-year growth, despite a strong 44% increase in Q3 to 155,941 units [4] Earnings Expectations - For the fiscal year ending December 2025, analysts anticipate CVNA's EPS to rise by 389.2% year-over-year to $4.99. The company's earnings surprise history is mixed, with three out of the last four quarters beating consensus estimates [5] - Among 23 analysts covering the stock, the consensus rating is a "Strong Buy," consisting of 15 "Strong Buy" ratings, three "Moderate Buys," and five "Holds" [5] Analyst Ratings and Price Targets - The current analyst configuration is more bullish than three months ago, with 12 "Strong Buy" ratings. UBS analyst Joseph Spak maintained a "Buy" rating and set a price target of $545 [6] - The mean price target of $491.86 suggests a premium of 19.6% to CVNA's current levels, while the highest price target of $600 implies a potential upside of 45.9% from current prices [6]