Carvana (CVNA) Stock Forecast & Price Target

Carvana is projected to achieve fourth-quarter revenue of $5.2 billion, reflecting a year-over-year increase of 46.4%, bolstered by a growth expectation of 36.3% in used unit sales. Recent momentum indicates that Carvana is positioned to surpass CarMax's used unit volumes six months earlier than initially anticipated, highlighting strong competitive dynamics in the market. Additionally, Carvana's integrated business model is expected to enhance its cost advantage over competitors, supporting attractive pricing for consumers and potential market share gains moving forward.

The negative outlook on Carvana Co's stock is primarily driven by a decline in total used vehicle unit sales, which fell by 2% year-over-year in the third quarter, marking a significant deceleration from an 8% increase in the second quarter. Additionally, the stock is trading at a multiple of 22x the estimated earnings per share for 2027, indicating a tighter premium to competitor CarMax, which has also reported anticipated decreases in comparable store used unit sales ranging from 8% to 12% year-over-year. Furthermore, shares have underperformed the S&P 500 index by approximately 13% over the last month, reflecting growing concerns within the credit markets and weaker performance projections from peers.