Carvana Stock Soars as Analysts Revise Price Targets

Carvana Stock Breaks Records with Latest Earnings

On October 30, Carvana (NYSE: CVNA) announced its Q3 2024 results, reporting earnings that exceeded analyst expectations. The consensus forecast for earnings-per-share (EPS) was $0.29, but Carvana delivered an impressive $0.64. Revenue also surpassed estimates, reaching $3.66 billion compared to forecasts of $3.45 billion.

A Bullish Market Reaction

As a result of these strong earnings, Carvana stock price saw a dramatic increase from $207.34 to $251.70 in premarket sessions, marking a stunning 24.88% rise and driving year-to-date (YTD) returns to 407.99%.

Analysts Express Optimism

Researchers on Wall Street have quickly turned bullish on CVNA stock, raising price targets significantly. Adam Jones of Morgan Stanley noted the earnings beat indicates that Carvana is achieving 'escape velocity' in profitable growth. Meanwhile, BTIG's Marvin Fong increased his target from $188 to $295.

Concerns Over Earnings Reporting

While the excitement is palpable, questions arise regarding the true nature of Carvana's profits. The company reported a gross profit per unit (GPU) of $7,685, which skews perceptions given it derives substantial revenue from loan sales—a point brought into focus by analysts.

Market Cap and Future Prospects

With a current market cap of $42.9 billion and 40 used car sales locations, the sustainability of Carvana's growth remains under scrutiny. Investors are advised to consider these factors before pursuing long positions in CVNA stock.