Carvana Shares Up 60% Since Q2 Earnings Announcement

Oppenheimer analysts lowered their price target on Carvana Co. (NYSE:CVNA) to $100 from $220, noting that trends at the company are stabilizing, but still are soft. The company’s shares rose more than 60% since its Q2 results announcement at the start of the month. Q2 EPS came in at ($2.35), worse than the Street estimate of ($1.91). Revenue was $3.88 billion, missing the Street estimate of $3.99 billion.

According to the analysts, sales and profit trends at the company have suffered lately, amid shifting, post-pandemic macro dynamics, and a confluence of unfavorable factors, including waning demand for more pricey pre-owned vehicles, elevated operational costs, and internal missteps.

The analysts expect 2022 adjusted EBITDA of ($912.4 million), down from their prior estimate of ($175.2 million), and compared to the Street estimate of ($783.0 million). The analysts introduced 2024 and 2025 adjusted EBITDA estimates of $362.6 million and $838.5 million, predicated upon conservatively forecasted units sold figures of 730,000 (vs. a Street estimate of 764,000) and 880,000, respectively.

The analysts said they remain upbeat about longer-term prospects for the company to deliver continued, steady market share gains, and, ultimately outsized profitability.