Carvana (CVNA) Stock Forecast & Price Target

Carvana is well positioned to benefit from a large, underpenetrated used-car market where online penetration remains in the very low single digits, giving it ample room to gain share as consumers gain trust in digital purchasing. Its reported retail units of over 595K in '25 and bottom-up estimates above Street in '26-27E point to continued expansion, while the ability to ramp volume without meaningfully higher fixed costs supports operating leverage. The company’s integrated model, proprietary software, AI-enabled labor tools, and improved reconditioning and fulfillment workflows should enhance profitable unit growth, lower labor hours per vehicle, and reinforce its industry-leading EBITDA margins.

Carvana is facing a deteriorating unit-economics profile as the latest mid-May ABS showed APRs down 13 bps to 10.54%, excess spread down 66 bps to 4.53%, and the over-collateralization target up 50 bps to 0.90%, all of which weaken gain-on-sale and lower Other GPU estimates. The company’s core retail growth still drives meaningful expense growth, and the analysis warns EBITDA dollars and margins may fail to keep pace, raising concern about its ability to fund debt obligations from ongoing operations. With additional risks from lower attach-rate profitability, potential loss of ABS market access, and a more adverse mix toward sub-prime buyers, the stock’s fundamental outlook remains negative.