Carvana Shares Drop Despite Record Q2 Earnings
Carvana (CVNA) shares fell sharply following the release of record-breaking second-quarter financial results, as management issued weaker-than-expected full-year guidance. The online used-car retailer reported a 52% year-over-year revenue increase to $7.38 billion and net income of $513 million on strong retail unit sales. However, its adjusted EBITDA forecast for the year—$2.7 billion to $3 billion—fell short of the consensus estimate of $2.99 billion. Investors were also concerned by a 200-basis-point contraction in CVNA’s adjusted EBITDA margin and a drop in non-GAAP gross profit per unit (GPU) by $455. Management attributed these issues to a cautious consumer environment, pressure on GPU components, and inventory rebalancing costs. Despite the selloff, Needham analyst Chris Pierce called it an opportunity for long-term investors, maintaining a 'Buy' rating with a price target of $120—more than double the current level. The overall Wall Street consensus remains cautiously optimistic, with a mean price target suggesting potential for over 50% growth in H2 2026.
Tickers: $CVNA
Topics: Carvana CVNA earnings report guidance market reaction