Carvana Shares Slide As Analysts Weigh Growth Strength Against Margin Pressures

Shares of Carvana Co (NYSE:CVNA) continued to slide after the company on Wednesday reported its third-quarter results.

Here are some key analyst takeaways:

• Needham analyst Chris Pierce maintained a Buy rating and price target of $500.
• BTIG analyst Marvin Fong reiterated a Buy rating and price target of $450.

Check out other analyst stock ratings.

 Needham: Carvana reported unit growth of around 9%, beating expectations by a wide margin, Pierce said in a note. He added, however, that the company's adjusted EBITDA per retail unit decline sequentially in the quarter.

The guidance for the fourth quarter implies a slowdown from the current growth rates, the analyst stated. This builds in conservatism "that may not even be needed despite the incredibly difficult y/y comp," he further wrote.

BTIG: Carvana's retail units sold came in at 155,941, while retail GPU (gross profit per unit) of $3,540 fell short of consensus of $3,660, Fong said. The average GPU of all traditional dealers that have reported results showed around the same decline as Carvana, he added.

Guidance calls for retail units of more than 150,000, which suggests a modest sequential decline, "but that tracks given the fourth quarter is a seasonally small quarter and CVNA will see a bit more headwind than most given it overindexes in EVs," the analyst wrote.

He raised his fourth-quarter revenue estimate from $4.9 billion to $5.2 billion, while lowering the adjusted EBITDA estimate from $526 million to $519 million.

CVNA Price Action: Carvana shares were down 10.07% at $318.29 at the time of publication on Thursday, according to Benzinga Pro data.

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