Carvana Q4 Earnings Preview: Improving Profitability, Growing Revenue, EV Sales Top Items To Watch

Used car online retailer Carvana Co CVNA looks to keep its streak of profitability and analyst beats intact when the company reports fourth-quarter financial results after market close Wednesday.

Here's a look at the earnings estimates from analysts and key items to watch.

Earnings Estimates: Analysts expect Carvana to report fourth-quarter revenue of $3.31 billion, up from $2.42 billion in last year's fourth quarter, according to data from Benzinga Pro.

The company has beaten analyst estimates for revenue in three straight quarters and five of the last 10 quarters overall. Meeting the analyst estimate would mark four straight quarters of revenue of $3 billion or more.

Analysts expect the company to report fourth-quarter earnings per share of 29 cents, up from a loss of $1.00 per share in last year's fourth quarter. The company has beaten analyst estimates for earnings per share in three straight quarters and seven of the last 10 quarters overall.

The company has reported a profit per share in three straight quarters with 64 cents per share, 14 cents per share and 23 cents per share reported in the last three quarters respectively. The company previously reported quarterly losses per share.

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Key Items to Watch: Momentum continues to be strong for Carvana, which has been one of the hottest turnaround stocks in recent years and also the subject to multiple short reports.

The stock saw a boost in its share price after Hindenburg Research announced it was closing shop with Carvana one of Hindenburg's last-ever short report targets. Kerrisdale Research also announced a short report a year ago.

Carvana's financial results and commentary could see the company take a victory lap against short sellers and call them out with improving profitability and financials.

A recent EV Trends Report from Carvana saw a leadership position in the used vehicle market with 5.7% of its used vehicles sold being electric vehicles, compared to 1.3% for the overall used car market.

Carvana could highlight this report and its growing presence in the electric vehicle market.

Analysts have been bullish on Carvana in recent months. In January, RBC Capital upgraded the stock from Sector Perform to Outperform highlighting a "remarkable turnaround" for the company in 2024.

Analyst Brad Erickson increased the Carvana price target from $270 to $280 and said analyst estimates might not be reflective of the company's growing market share.

"We raise our estimates ~4% ahead of Street for Q4 and ~2% for 2025, and could still wind up overly-conservative," Erickson said.

Erickson also said the retail marketplace could be a meaningful driver of unit growth over time for Carvana.

Here are other recent analyst ratings for Carvana and their price targets:

• Wedbush: Reiterated Neutral rating, with a $250 price target
• Stephens & Co: Reiterated Overweight rating, with a $300 price target
• JPMorgan: Maintained Overweight rating, raised price target from $300 to $350

Carvana sold 108,651 vehicles in the third quarter, up 34% year-over-year. This will likely be one of the key figures for the company along with its revenue and earnings per share. Carvana also reported a significantly higher profit per vehicle in the third quarter on a year-over-year basis, which is another key item for investors to watch.     

Shares of Carvana traded under $10 in May 2023 and under $5 in January 2023. The company faced investor concerns about potential bankruptcy in 2022 and 2023 due to its debt obligations.

Some investors recognized a potential turnaround and others saw a potential short squeeze with a high level of shares shorted due to the bankruptcy concerns.

The company restructured operations and debt and took on the task of turning things around.

Management is bullish on the company's future in the highly fragmented used cars sector.

"With just 1% share in an enormous market, significant capacity to support growth, and a business that generates positive feedback as it scales, we are just getting started," Carvana CEO Ernie Garcia said after third-quarter results.

CVNA Price Action: Carvana stock was down 0.3% to $284.53 on Tuesday. The stock hit new 52-week highs of $291.27 earlier in Tuesday's trading session. The stock is up 42.6% year-to-date in 2025 and up over 449% in the last year.

Photo Courtesy: Shutterstock.com

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