What's Going On With Carvana Stock Today?

Carvana Co CVNA shares are trading higher Monday on continued strength after the company reported better-than-expected quarterly results last week and laid out expectations for positive EBITDA in the second quarter.

What Happened: Carvana said first-quarter revenue fell 25% year-over-year to $2.61 billion, partly due to an internal focus on profitability. The company's top-line results still topped estimates of $2.6 billion.

Carvana reported a quarterly loss of $1.51 per share, which beat estimates for a loss of $2 per share.

"The first quarter was a big step in the right direction and there are more steps to come. Given our strong start to the year, we expect to achieve positive adjusted EBITDA in Q2 2023," said Ernie Garcia, CEO of Carvana.

Retail units sold totaled 79,240, representing a decrease of 25% year-over-year. Inventory was down 21% sequentially. Advertising spend was reduced by 64% year-over-year. 

In a letter to shareholders, the company said, "Looking forward, we expect inventory size and advertising spend to begin to stabilize in Q2. In addition, while we expect to continue executing our profitability initiatives for at least several more quarters, we believe the pace of these new initiatives will eventually slow, reducing internally driven impacts to sales volume."

Following the print, Piper Sandler analyst Alexander Potter maintained Carvana with an Overweight rating and raised the price target from $20 to $21.

Related Link: Carvan-yeah! Auto Giant's Q1 Earnings Drive Optimism, Analysts Rejoice

According to Benzinga, Carvana currently has a short interest of 69.49%, which could be helping fuel Monday's strong rally. The stock is moving on above-average volume and it was among the top trending tickers on Stocktwits at last check.

CVNA Price Action: Carvana shares were up 15.6% at $10.38 at the time of writing, according to Benzinga Pro.

Photo: Tony Webster from Flickr.