Summary of Carvana's Conference Call Company Overview - **Company**: Carvana - **Industry**: Used Car Retailing Key Points and Arguments 1. **Growth Trajectory**: Carvana has experienced significant growth, increasing approximately 16 times over the past eight years, with an adjusted EBITDA margin improvement from negative 20% to 11.5% in Q1 [5][24] 2. **Record Performance**: In Q1, Carvana sold approximately 134,000 retail units, achieving an annualized run rate of over half a million units, making it the second-largest seller of used cars in the U.S. [6][34] 3. **Profitability Metrics**: The company reported record adjusted EBITDA of nearly $500 million and GAAP operating income of approximately $400 million for the quarter [7][34] 4. **Market Share Growth**: Carvana's retail units sold grew by 46% year-over-year, significantly outpacing other large players in the industry, which saw growth in the low single digits [8][34] 5. **Customer Experience**: The company has invested in creating a seamless online customer experience, which has resonated well with customers and is expected to drive future growth [11][12] 6. **E-commerce Adoption**: Carvana is positioned early in the e-commerce adoption curve for auto sales, with current penetration at 1-2%, compared to 18-19% in other retail sectors, indicating substantial growth potential [15][16] 7. **Selection and Inventory**: The unique nature of the used vehicle market allows for a vast number of SKUs, providing opportunities for Carvana to expand its selection and improve customer satisfaction [17][19] 8. **Long-term Goals**: Carvana aims to sell 3 million cars per year within 5-10 years, targeting adjusted EBITDA margins of 13.5% [24][27] 9. **Operational Scalability**: The acquisition of the ADESA physical auction network has enhanced Carvana's national footprint, facilitating more efficient scaling of operations [29][30] 10. **Production Capacity**: The company is currently adding about 80 units of production capacity per week across its locations, with plans to integrate more ADESA sites into its operations [31][32] Additional Important Insights - **Customer Trust and Brand Awareness**: Building awareness and trust in Carvana's online offering is seen as a critical long-term growth driver [14][16] - **Positive Feedback Loops**: Increased selection leads to more efficient advertising and improved customer experience, creating a cycle of growth [18][19] - **Financial Performance**: Carvana has maintained strong margins, converting over 80% of adjusted EBITDA into GAAP operating income in Q1 [22][34] - **Future Execution**: The company emphasizes the importance of operational execution at scale to achieve its ambitious growth targets [28][34]

Market Overview - Wall Street experienced a significant rally in May, driven by expectations of a U.S.-China trade deal and delays in tariff imposition by the Trump administration on the European Union, which boosted confidence in equities [1] - The market rally is expected to continue in June, supported by declining inflation rates, with the personal consumption expenditures price index rising only 0.1% month-over-month and 2.1% year-over-year, marking its lowest level since 2025 [4] Recommended Growth Stocks - Five growth stocks are recommended for June, all of which have shown double-digit returns in the last month and possess a favorable Zacks Rank [2][3] - The recommended stocks are AppLovin Corp. (APP), Amphenol Corp. (APH), Intuit Inc. (INTU), Carvana Co. (CVNA), and Stantec Inc. (STN), each with a Zacks Rank 1 (Strong Buy) and a Growth Score of A or B [3] AppLovin Corp. (APP) - AppLovin is focused on enhancing marketing and monetization for mobile app developers through its software-based platform [7] - The company reported strong fundamentals, with an expected revenue growth rate of 24.3% and earnings growth of 85.2% for the current year, driven by its AI-powered AXON 2.0 technology [10][9] Amphenol Corp. (APH) - Amphenol provides connectivity solutions utilizing AI and machine learning technologies, with a diversified business model that supports growth across various sectors [11][12] - The company anticipates a revenue growth rate of 32.3% and earnings growth of 40.7% for the current year, bolstered by increased defense spending and the Andrew acquisition [13] Intuit Inc. (INTU) - Intuit benefits from steady revenues across its Online Ecosystem and Desktop business segments, with strong performance in its Credit Karma and cloud-based services [14][15] - The expected revenue growth rate for Intuit is 14.8%, with earnings growth projected at 18% for the current year [17] Carvana Co. (CVNA) - Carvana's acquisition of ADESA's U.S. operations has enhanced its logistics and auction capabilities, positioning it for significant growth in the used car market [18] - The company expects a revenue growth rate of 31.4% and more than 100% earnings growth for the current year, with a focus on improving operational efficiency [20] Stantec Inc. (STN) - Stantec provides a range of professional consulting services in planning, engineering, and environmental sciences, focusing on infrastructure and facilities projects [22][23] - The expected revenue growth rate for Stantec is 11.1%, with earnings growth projected at 18.6% for the current year [24]

Group 1 - The used car sales in 2024 increased by 2.2% to 15.9 million vehicles, marking the highest sales since 2019 [1] - The growth in used car sales is attributed to replenished inventories and rising demand for hybrid and electric vehicles [1]