Evaluating Carvana: Insights From 21 Financial Analysts

In the last three months, 21 analysts have published ratings on Carvana CVNA, offering a diverse range of perspectives from bullish to bearish.

The table below offers a condensed view of their recent ratings, showcasing the changing sentiments over the past 30 days and comparing them to the preceding months.

Insights from analysts' 12-month price targets are revealed, presenting an average target of $150.95, a high estimate of $200.00, and a low estimate of $110.00. Witnessing a positive shift, the current average has risen by 20.97% from the previous average price target of $124.78.

Diving into Analyst Ratings: An In-Depth Exploration

The analysis of recent analyst actions sheds light on the perception of Carvana by financial experts. The following summary presents key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: Responding to changing market dynamics and company performance, analysts update their recommendations. Whether they 'Maintain', 'Raise', or 'Lower' their stance, it signifies their response to recent developments related to Carvana. This offers insight into analysts' perspectives on the current state of the company.
• Rating: Delving into assessments, analysts assign qualitative values, from 'Outperform' to 'Underperform'. These ratings communicate expectations for the relative performance of Carvana compared to the broader market.
• Price Targets: Analysts navigate through adjustments in price targets, providing estimates for Carvana's future value. Comparing current and prior targets offers insights into analysts' evolving expectations.

Navigating through these analyst evaluations alongside other financial indicators can contribute to a holistic understanding of Carvana's market standing. Stay informed and make data-driven decisions with our Ratings Table.

Stay up to date on Carvana analyst ratings.

Discovering Carvana: A Closer Look

Carvana Co is an e-commerce platform for buying and selling used cars. The company derives revenue from used vehicle sales, wholesale vehicle sales and other sales and revenues. The other sales and revenues include sales of loans originated and sold in securitization transactions or to financing partners, commissions received on VSCs and sales of GAP waiver coverage. The foundation of the business is retail vehicle unit sales. This drives the majority of the revenue and allows the company to capture additional revenue streams associated with financing, VSCs, auto insurance and GAP waiver coverage, as well as trade-in vehicles.

A Deep Dive into Carvana's Financials

Market Capitalization Analysis: Above industry benchmarks, the company's market capitalization emphasizes a noteworthy size, indicative of a strong market presence.

Revenue Growth: Carvana's remarkable performance in 3 months is evident. As of 30 June, 2024, the company achieved an impressive revenue growth rate of 14.89%. This signifies a substantial increase in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Consumer Discretionary sector.

Net Margin: Carvana's net margin falls below industry averages, indicating challenges in achieving strong profitability. With a net margin of 0.53%, the company may face hurdles in effective cost management.

Return on Equity (ROE): Carvana's ROE is below industry standards, pointing towards difficulties in efficiently utilizing equity capital. With an ROE of 4.42%, the company may encounter challenges in delivering satisfactory returns for shareholders.

Return on Assets (ROA): Carvana's ROA is below industry standards, pointing towards difficulties in efficiently utilizing assets. With an ROA of 0.25%, the company may encounter challenges in delivering satisfactory returns from its assets.

Debt Management: Carvana's debt-to-equity ratio is notably higher than the industry average. With a ratio of 11.69, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

What Are Analyst Ratings?

Analysts work in banking and financial systems and typically specialize in reporting for stocks or defined sectors. Analysts may attend company conference calls and meetings, research company financial statements, and communicate with insiders to publish "analyst ratings" for stocks. Analysts typically rate each stock once per quarter.

Beyond their standard evaluations, some analysts contribute predictions for metrics like growth estimates, earnings, and revenue, furnishing investors with additional guidance. Users of analyst ratings should be mindful that this specialized advice is shaped by human perspectives and may be subject to variability.

This article was generated by Benzinga's automated content engine and reviewed by an editor.