CVNA sees record 12.4% adjusted EBITDA margin in Q2, fueled by efficiency, cost cuts and its vertically integrated model.
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Zacks.com users have recently been watching Carvana (CVNA) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects.
Carvana has reported that electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) made up 9% of total vehicles sold in Q2 2025, up from just over 2% in Q2 2023.
Key Points in This Article: Carvana‘s (CVNA) stock has surged 7,300% over the past two years, a remarkable turnaround story that defied the experts.
Carvana previously struggled in a weakening used car market, but has resurged in a major turnaround. Growing efficiencies underline Carvana's advantageous business model and increasing moat. The Q2 report showed rapid earnings momentum, reflecting such efficiencies. Competitive advantages and a fragmented market provide an attractive long-term growth runway for Carvana.
Carvana's promising performance metrics highlight its ongoing reversal from prior pandemic pains, as they competently monetize the used car inventories and in-house loan sales. These reasons may also be why the management has felt confident to offer robust FY 2025 adj. EBITDA guidance, with the cash flows already flowing into its healthier balance sheet. With used cars cheaper than new cars, we believe that CVNA may continue to outperform in the near term for so long that demand remains healthy.
Initiate Strong Buy on Carvana, citing its disruptive, vertically integrated online used-car platform and superior scale-driven efficiencies over peers. Forecasting 35-40% unit growth, 5% ASP tailwinds, and FCF breakeven by Q3 FY25, with positive EBITDA in FY26 and ~30% upside to $478.87 PT. Key catalysts: ADESA mega-site integration, digital marketing acceleration, and expanding integrated finance platform driving margin expansion and multiple re-rating.
CVNA's ADESA acquisition is fueling faster deliveries, lower costs and a bold push toward long-term growth targets.
Despite a tough market, I remain bullish on Carvana due to its strong Q2 earnings, expanding market share, and robust profitability. Used car demand is surging, Carvana's GPU is at record highs, and economies of scale are driving margins and GAAP profitability. Carvana's valuation is rich, but its superior growth, expanding margins, and early-stage market penetration justify staying long post-earnings.
The period is undoubtedly hectic for market participants, with companies finally revealing what's transpired behind closed doors.
Carvana Co. (NYSE:CVNA) shares surged almost 20% as its second quarter results beat Wall Street estimates on the top and bottom lines. The used car eCommerce platform posted revenue of $4.84 billion, up 42% year-over-year and ahead of estimates of $4.53 billion.