Core Insights - Consumer discretionary stocks have struggled in 2025, with the sector ranking fourth worst among the 11 S&P 500 sectors YTD, showing a loss of 2.43% [3] - Carvana, an online-only used vehicle retailer, has performed exceptionally well, with its shares up nearly 62% YTD, despite the overall sector downturn [4] Financial Performance - Carvana's stock reached an all-time high (ATH) of $395.41 on October 1, but has since corrected by over 18% following mixed Q3 earnings results released on October 29 [5][7] - The company reported earnings per share (EPS) of $1.03, missing expectations by 26 cents, while revenue increased by 54.5% year-over-year to $5.65 billion, surpassing expectations of $5.04 billion [6] - Despite the Q3 miss, Carvana's earnings are projected to grow by 78.25% next year, increasing from $2.85 to $5.08 per share [6] Market Sentiment and Risks - Analysts have an average 12-month price target for Carvana that suggests a potential upside of over 28% [8] - Concerns have been raised regarding Carvana's lending practices, particularly its high 99% approval rate for loans, which includes borrowers with low credit scores and a minimum income requirement of just $10,000 per year [8] - The approval criteria are notably low, as the 2025 U.S. federal poverty level for a one-person household is $15,650, indicating that Carvana is approving loans to individuals earning 36% below this threshold [9]