Why Is CVNA Stock Rising 8% Overnight?

• Carvana’s Q3 vehicle sales increased 39% to 217,385 units.
• However, EPS of $0.39 missed analysts’ consensus estimate of $0.48. 
• Carvana CEO Ernest Garcia aims to sell three million vehicles annually and achieve a 13.5% adjusted EBITDA margin. 

Carvana (CVNA) stock jumped 8% overnight after the online used-car retailer reported record third-quarter sales and revenue, with retail vehicle sales climbing 39% year-on-year to 217,385 units and revenue surging 42% to $8.04 billion. CEO Ernest Garcia also reaffirmed ambitious long-term targets for sales growth and profitability. 

Carvana stock is up 2.1% so far this year and is on track to reverse a seven-week losing streak. 

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Carvana Reports Record Sales And Revenue

The Phoenix-based company’s Q3 revenue rose to $8.04 billion, surpassing analysts' expectations of $7.7 billion, according to Fiscal.ai. Carvana reported net income of $483 million, an 83% surge. However, earnings of $0.39 per share missed the Street’s estimate of $0.48. Adjusted EBITDA climbed to a quarterly record of $800 million, with a 10% margin. 

Carvana said its sales growth outpaced the wider auto market, where sales stayed mostly flat year over year. The company gained customers from rivals, while high new-car prices encouraged more budget-conscious buyers to choose used vehicles. 

Carvana expects adjusted EBITDA for 2026 to land near the upper end of its previously announced outlook of $2.7 billion to $3 billion.

Carvana CEO Says Company Now Focuses On Profit 

During the Q3 earnings call, CEO Garcia said Carvana is pursuing a major expansion plan to increase annual vehicle sales to three million and reach an adjusted EBITDA margin of 13.5%. 

“This is our first quarter with over 200,000 sales. Our run rate is now 870,000, double what it was just two years ago. This was also our first quarter with $8 billion of revenue. We are the most profitable automotive retailer with margins that are approximately twice the industry average for the 10th quarter in a row,” said Garcia.

Carvana recovered from its financial troubles after restructuring its debt in 2023, cutting debt by about $1.2 billion and delaying interest payments. 

CVNA Stock: Retail View

On Stocktwits, retail sentiment around the stock shifted to ‘neutral’ from ‘bullish’. 

A user said, “10-year bonds at 5.5% or 6% will wreck this stock!”

CVNA stock has cratered 30% year-to-date. 

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