Carvana Stock Continues To Climb: What's Going On?

Carvana Co CVNA shares are trading higher Monday, adding to gains of more than 575% since the start of the year. The rally has accelerated in the last few months. Here's a look at what's been driving the action.

What Happened: Carvana shares are up more than 250% in just the last three months. The surge in shares was sparked by the company's better-than-expected financial results at the beginning of May. The company also laid out expectations for positive EBITDA in the second quarter.

Carvana reported a quarterly loss of $1.51 per share, which easily beat estimates for a loss of $2 per share. The earnings surprise was driven by the company's renewed focus on profitability. Advertising spend was down 64% year-over-year in the quarter. 

Carvana then raised its second-quarter outlook in early June. The company said it expects adjusted EBITDA to come in above $50 million and total gross profit per unit to be above $6,000. 

Several analysts raised price targets following the announcement, which has helped fuel a continued rally in shares. The stock has also been heavily shorted along the way, with 63.5% of the float currently sold short. 

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Carvana is set to report second-quarter financial results on Aug. 3. The company said it will discuss its business in a conference call following the release.

On Monday, Carvana said its total EV sales have increased by 786% over the past five years. The company highlighted a recent study that showed that consumers are increasingly willing to purchase a vehicle fully online. 

CVNA Price Action: Carvana shares were up 15.1% at $33.85 at the time of publication, according to Benzinga Pro.

Photo: Tony Webster from Flickr.