Core Viewpoint - Carvana's upcoming earnings report on February 18, 2026, is critical for investors, as it may redefine the company's narrative following its turnaround and inclusion in the S&P 500 Index [1][2]. Company Overview - Carvana is an e-commerce platform specializing in the online buying, selling, financing, and home delivery of used vehicles, based in Tempe, Arizona [4]. - Since its IPO in 2017, Carvana has transformed from near-bankruptcy to achieving strong profitability margins, streamlined operations, and rapid sales growth, currently holding a market capitalization of $74.8 billion [5]. Financial Performance - The company has shown significant growth in retail unit sales and revenue, marking a turnaround from previous years of volatility and losses [6]. - Carvana's stock reached a 52-week high of $486.89 on January 23, 2026, driven by improved fundamentals and investor confidence [6]. Market Dynamics - Despite a strong performance, Carvana's stock has retreated by 29.3% from its peak, with total 52-week returns at approximately 27% [7]. - Recent investor anxiety has been fueled by a report from Gotham City Research alleging accounting irregularities, leading to a nearly 14% decline in stock price over the past five days and an 18% drop year-to-date [8].

Core Viewpoint - Carvana Co. is under investigation for potential violations of federal securities laws due to significant stock price drops linked to claims of accounting improprieties [1][2]. Company Overview - Carvana operates as an online e-commerce platform and used-car retailer, facilitating the buying, selling, and financing of vehicles entirely online. A substantial portion of its revenue is derived from online vehicle sales and auto loans, which are often securitized or sold to external parties [3]. Investigation Details - The investigation by Bleichmar Fonti & Auld LLP focuses on whether Carvana overstated its earnings and improperly accounted for related party transactions [3]. - Gotham City Research LLC released a report alleging that Carvana's financial results are closely tied to a network of related entities controlled by Ernest Garcia II, including DriveTime, Bridgecrest, and GoFi. The report claims that these relationships led to an overstatement of Carvana's earnings by over $1 billion, indicating substantial risks for investors [4]. Stock Performance - Following the release of the Gotham City report, Carvana's stock price fell over 20%, dropping from $474.06 per share at market open on January 28, 2026, to a low of $374.55 per share [5].

Core Insights - Carvana Co. (CVNA) has experienced a remarkable turnaround, emerging as a standout performer in the market with strong stock appreciation and renewed investor confidence in its business model [1][4] - The company reported record-breaking quarterly results in revenue, unit sales, and profitability, leading to its inclusion in the S&P 500 Index, marking a significant milestone in its recovery [1][7] - Carvana's stock has rallied approximately 95.7% over the past year, with year-to-date gains of 115.6%, closing at $438.47, driven by improving fundamentals and record vehicle sales [6] Company Overview - Carvana is a leading e-commerce platform focused on the buying, selling, financing, and delivery of used vehicles, operating one of the most ambitious vertically integrated automotive businesses in the U.S. [3] - Since its IPO in 2017, Carvana has transformed from near-bankruptcy to achieving strong profitability margins and rapid sales growth, with a current market cap of around $96.1 billion [4][5] Market Performance - Following a near-collapse in late 2022, Carvana's shares have surged thousands of percent, significantly outperforming peers and the broader S&P 500 [5] - The stock saw heightened momentum after the announcement of its inclusion in the S&P 500 Index, resulting in a 12.1% intraday surge on December 8 and reaching a 52-week high of $485.33 on December 12 [6][7]

Group 1 - Offerpad Solutions stock (NYSE:OPAD) experienced a trading increase of approximately 130%, gaining attention as a meme stock driven by online hype rather than fundamentals [2] - The stock's surge is also influenced by Fed Chair Jerome Powell's indication of a potential interest rate cut in September, which could enhance housing activity and demand on Offerpad's platform [2] - Peers like Opendoor have also benefited, with its stock nearly tripling in value this year [2] Group 2 - Despite the stock's seemingly low Price-to-Sales ratio of 0.2x compared to the S&P 500's 3.3x, this figure is misleading as Offerpad recognizes full home sale prices as revenue, not actual profit margins [3] - The company has experienced a 42% average annual revenue decline over the last three years, with a 30% decline in the last twelve months, indicating weak underlying performance [3] - Offerpad's operating margins are at -6% and net margins at -8%, with significant debt of $217 million, which is about double its $111 million market capitalization [3]