Carvana Co. (NYSE:CVNA) is accelerating the move away from dealerships, powered by a digital, vertically integrated model as credit worries fade and demand remains resilient.

Needham's Mackenzie Holleran reaffirmed a Buy on Carvana with a $500 target.

She said Carvana leads the shift from traditional auto retail through a digital-first, data-driven, capital-efficient, vertically integrated model.

That approach, she says, delivers a cleaner, more compelling buying experience than incumbents and should create meaningful value over several years.

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Holleran’s $500 price forecast implies a 35x multiple of projected 2027 adjusted EBITDA, supported by a durable, profitable growth profile.

She said fears around subprime exposure are over-extrapolated and often anchored to Carvana's formerly brittle operations. If credit worsens, she modeled two effects.

First, a one-time Other GPU hit from timing as borrower rates adjust and spreads normalize.

Second, a reassessment of long-term unit growth, with long-horizon investors likely to look past transitory drag.

She added consensus unit growth already screens conservatively, lowering the risk of negative revisions.

Holleran’s view is reinforced by improving the supply of used vehicles and easing rates. She expects lower average selling prices and smaller monthly payments to offset tighter credit. Under that backdrop, she believes unit demand should hold up.

The analyst expects the company to report 2025 revenue of $18.491 billion, with EBITDA of $2.100 billion.

Price Action: CVNA shares are trading higher by 2.21% to $349.50 at last check on Friday.

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