Carvana Stock Gets A Lift From Wall Street Price-Target Hikes: Retail Stays On Sidelines

Shares of Carvana Co. ($CVNA) rose over 2% on Tuesday following bullish signals from Wall Street, although retail investors remained divided. 

Jefferies raised its price target for the online used-car retailer to $185 from $150, maintaining a ‘Hold’ rating. Evercore ISI Group also lifted its price target to $182 from $178.

Carvana recently reported that, as of Q3 2024, it has sold and purchased over 2 million cars since its founding in 2013. 

The stock has surged more than 170% in the last six months, with some analysts pointing to the company’s potential for “sustained long-term growth” in a recovering market.

On Stocktwits, retail sentiment turned ‘neutral’ on Tuesday, dropping from ‘bullish’ a day earlier. 

While some investors expect the stock to breach the $200 mark, bearish voices remain cautious, citing overvaluation concerns and highlighting insider sales.

CEO Ernie Garcia II and his father Ernie Garcia III, a major shareholder, have reportedly been cashing out millions this year on the back of the stock's stellar rebound. 

Carvana, which was on the verge of bankruptcy not long ago, has reported two consecutive quarterly profits this year, surprising investors. 

The company previously struggled after misjudging post-pandemic demand, leading to a debt restructuring in 2022. 

Interest expenses reportedly rose to $173 million last quarter, up from $155 million a year earlier.

Carvana will report Q3 earnings next week, with analysts forecasting $0.29 EPS on revenue of $3.45 billion. 

Year-to-date, CVNA shares have more than quadrupled, far outpacing the S&P 500 and the Nasdaq.

For updates and corrections email newsroom@stocktwits.com

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