By Carvana Co (NYSE: CVNA) sees “significant” further room for growth this year even though it already had a record 2024.
The company’s fourth-quarter results came in ahead of estimates last night as well.
Still, shares of the online used car retailer are down nearly 10% in premarket on Thursday.
Today’s sell-off is primarily related to just one metric that declined on a year-over-year basis in CVNA’s fourth financial quarter: revenue per retail vehicle sold.
Despite the decline, Carvana stock is currently up roughly 30% versus the start of 2025.
Why is Carvana stock down on Thursday?
Carvana sold a total of 114,379 retail vehicles in its fourth financial quarter – an annualised growth of about 50%.
The company’s per-unit revenue for retail vehicles declined 4.5% on a year-over-year basis to $22,312, signalling higher costs or inefficiencies in the sales process, neither of which bode well for its overall financial health.
CVNA shares failed to extend their upward trajectory despite an otherwise solid report because they were priced to perfect heading into the earnings release.
There was hardly any room for error in its quarterly update, according to Davidson analysts.
Note that Carvana stock, at writing, is down nearly 30% versus its all-time high in August of 2021.
Should you buy the dip in CVNA shares today?
Nicholas Jones of Citizens JMP sees weakness in shares of the online used car retailer today as a buying opportunity because there were many positives in Carvana’s Q4 earnings report.
Jones reiterated his “outperform” rating on CVNA this morning and raised his price target on the firm to $340 that indicates potential for about a 22% upside from current levels.
The Citizens JMP analyst remains constructive on Carvana stock also because he has immense confidence in the leadership of Ernie Garcia, who, in the earnings release, told investors:
With just ~1.0% market share today and many opportunities to improve and expand our offering from here, we know this is just the beginning of our journey to change the way people buy and sell cars.
Carvana Q4 earnings highlights
Carvana earned 56 cents a share in its recently concluded quarter on $3.55 billion in revenue.
Analysts, in comparison, were at 29 cents per share and $3.31 billion instead.
The company based out of Tempe, AZ ended last year with revenue up 27% and expects a further increase in the retail units sold as well as adjusted EBITDA in 2025.
CVNA stock has been a millionaire maker in recent years, having soared from a low of about $4.0 only in late 2022 to a high of $285 last week.
That said, the NYSE listed firm remains unattractive for income investors as it does not currently pay a dividend.
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