Track market-moving stories before they get noisy

While macroeconomic and geopolitical challenges mount, the ecommerce market is growing through innovation, technology and insight, as it continues to take away slices of the total retail pie. Commerce Department numbers are proof of this trend: ecommerce sales in the first quarter of 2026 grew 9.8% over 1Q25 (2.7% sequentially), with total retail sales increasing 3.9% (1.5% sequentially). Ecommerce accounted for around 16.9% of total U.S. retail sales. A point to note here is that consumers are increasingly blending their online and offline shopping experiences, so this distinction may ultimately become irrelevant. As a corollary, it is those retailers that have the capacity to sell through both channels that will be able to compete tomorrow.

 While ecommerce continues to take share from traditional retail, the pace has moderated. Additionally, geopolitics is a major challenge for ecommerce players at the moment given the wars, tariffs and tensions between nations today that are disrupting supply chains, increasing costs and reducing efficiencies. This creates a highly competitive environment where growth comes mainly from price competition and share gains.

 Our picks Wayfair (W - Free Report) and Carvana (CVNA - Free Report) are doing precisely that. Wayfair offers a huge range of home improvement products along with nationwide infrastructure and logistics in an attractive format that allows it to record significant share gains. It has trimmed its cost structure, so its surging revenues are falling through to the bottom line. Carvana is seeing even stronger share gains, as it offers a superior online buying experience in a used-car market that is still largely brick-and-mortar.

Both companies are sensitive to interest rate movements however, therefore the latest FOMC deliberations are not supportive. We believe they will continue to grow regardless because of their unique capabilities and market positioning.

 The convenience of online shopping (particularly through mobile devices) remains the top reason for ecommerce volumes, along with the merging of physical and digital channels. Gen-Z is the biggest driver, which is, increasingly, the more relevant demographic.

Many of these buyers have grown up on the Internet and are accustomed to a high level of digitization. They are also likely to hang out on popular social media platforms, allowing themselves to be influenced by the latest trends there. This is driving an entirely different perspective on the ecommerce space, one that revolves around digital influencers and appears to be expanding with more advanced technology such as AR/VR, social commerce and generative AI.

About the Industry Internet - Commerce refers to all economic activity (B2B, B2C, C2C, DTC) through websites, mobile apps, online marketplaces. and social commerce platforms. It therefore continues to evolve as the technologies driving it advance, whether on the consumer side or the platform provider side that increasingly includes a combination of chatbots, AI and social media, as well as payments and checkout systems, digital marketing, logistics and fulfillment, cross-border trade, and customer data/analytics tools.

Differentiation comes from better technology for improved showcasing, range, easier navigation and payment, speedier delivery and returns, brand building, comparison shopping, loyalty, etc. as well as good customer service and more (and free) shipping options, which generally tip the scales in favor of larger players. 

Current Trends Driving the Internet-Commerce Industry ·Macroeconomics and geopolitics do not favor the industry right now. The macroeconomic environment is creating a more cautious and cost-sensitive backdrop for the industry, shifting it from a high-growth phase to one focused on efficiency and profitability. Elevated inflation has reduced consumers’ real purchasing power, leading to weaker discretionary spending and a greater focus on essentials, discounts and value-driven purchases. At the same time, still-high interest rates keep borrowing costs for both consumers and companies elevated, affecting both the production and consumption sides of the equation. Consumer confidence about the current labor market continues to soften and consumption is still being driven largely by inflation. As a result, there is continued pressure on conversion rates and basket sizes, while rising labor, logistics and warehousing costs continue to squeeze margins. As a result, companies are prioritizing cost control, automation and higher-margin revenue streams such as advertising and subscriptions to sustain profitability in a slower-growth environment. Geopolitics is simultaneously reshaping the industry by disrupting the global infrastructure that e-commerce depends on. Trade tensions, tariffs and regional conflicts are increasing the cost of goods and creating volatility in supply chains, leading to delays, stock shortages and higher shipping expenses. At the same time, the global trading system is becoming more fragmented, with companies shifting toward regional supply chains and “friendshoring” strategies to reduce risk, even at the cost of efficiency. Regulatory complexity is also rising.Competition is heating up. Ecommerce has raised the bar on what is an acceptable online marketplace. Today, it is one that offers low prices, fast or free shipping, hassle-free returns and a seamless omnichannel experience. Then again, because it is so easy to switch platforms, customer loyalty is hard to pin. Therefore, players increasingly find that mere online presence isn’t enough. They must strive for operational excellence, differentiated customer experiences, efficient logistics and disciplined capital allocation in order to stay in business.AI is shaping up to be one of the major enablers of ecommercebecause it transforms e-commerce from a generic marketplace into a highly customized, data-driven ecosystem that boosts both revenue growth and profitability. AI allows platforms to use customer data to optimize every step of the shopping experience. Companies like Amazon and Shopify leverage AI to deliver demand forecasting, targeted advertising, dynamic pricing and personalized product recommendations, significantly improving conversion rates and average order value. On the operational side, it helps optimize inventory and supply chains, reducing costs and enabling efficient deliveries. The latest development here is agentic commerce where LLM models like ChatGPT recommend products, compare features and complete the sale. Even if you’re unsure about what to buy, the statement of your general intention may be enough to complete a sale. As a result, customers get increasingly comfortable with the superior recommendations and personalization it offers. For example, Adobe estimates that traffic to retail sites from generative AI tools was up 693.4% year over year in the 2025 holiday season.The total retail experience between physical and digital continues to blur as most consumers blend their online and offline activities. This usually takes the forms of research online and buy in-store or buy online and pick up in-store. Physical stores are increasingly experience centers allowing the traditional touch and feel that many customers can’t do without. Some also prefer to walk out with their purchase. Therefore, a solid physical presence is undoubtedly a positive. Also, any experience that increases the speed of delivery/pickup is preferred. This may entail increased reliance on robots, self-driven delivery vehicles and drones that could ease bottlenecks and make deliveries smoother and cheaper.A leading trend is Gen-Z popularizing social commerce. Social commerce means the ability to discover, research and complete the purchase of products and experiences on a social media platform. Consumers shift from intent-based search to content-driven discovery while scrolling through short videos, influencer content or live streams on platforms like TikTok or Instagram. Zacks Industry Rank Indicates Weakness The Zacks Internet - Commerce industry is a rather large group within the broader Zacks Retail And Wholesale sector. It carries a Zacks Industry Rank of #180, which places it in the bottom 27% of 247 Zacks industries.

Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. So the group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates negative near-term prospects.

Ecommerce being in the bottom 50% of Zacks-ranked industries is the result of its relative performance versus others. What we’re seeing in the aggregate estimate revisions for 2026 is a more or less steady decline until March this year, followed by slight recovery. The 2027 estimate follows the same general trend but the recovery is somewhat sharper.

The past year has seen the aggregate earnings estimate for 2026 shrink 6.5%, while that for 2027 dropped 1.2% from 2025 actuals. The macroeconomic uncertainty, adverse geopolitics, the cautious tone around rate cuts, consumer thrift are contributing to softer spending and thus weaker estimates.

Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry Returns Have Been Moderate Over the past year, the Zacks Electronic - Commerce Industry has traded relatively close to the broader Retail and Wholesale sector although the S&P 500 pulled ahead in November.  

The stocks in this industry have collectively gained 1.9% over the past year, compared to the 2.4% gain for the broader Zacks Retail and Wholesale Sector and the 24.2% gain for the S&P 500.

One-Year Price Performance

Image Source: Zacks Investment Research

Industry Somewhat Undervalued Over the past year, the industry has mostly traded at a premium to the S&P 500 and a discount to the broader industry. Its current price-to-forward 12 months’ earnings (P/E) of 21.85X represents a premium of 2.9% to the S&P 500’s 21.24X, a 5.1% discount to the broader retail sector’s 22.97X and a 10.3% discount to its median value of 24.37X. The shares have traded in the range of 21.12X to 26.11X over the past year.

Forward 12 Month Price-to-Earnings (P/E) Ratio

Image Source: Zacks Investment Research

2 Stocks to Add to Your Portfolio There is a significant variety of stocks in this industry in terms of lines of business, business model, location and so forth. This is also the reason that choosing stocks especially in the current environment can be tricky. We have used our proprietary ranking system to pick 2 stocks that appear attractive today.

Wayfair Inc. (W - Free Report) : Boston, MA-based Wayfair is an online retailer of a broad range of home improvement products across the furniture, décor, lighting, kitchenware, home improvement and outdoor categories. It has a large supplier network and proprietary logistics infrastructure supporting deliveries across the U.S.

Wayfair’s greatest strength is in the scale of its offerings (over 40 million products from more than 20,000 suppliers), which along with its investments in its logistics network and technology platform, enables it to deliver exceptional customer service and record share gains. Internally, the goal is to maximize EBITDA dollars while using excess cash to manage debt and buy back shares. The first-quarter EBITDA margin of 5.2% was the best in five years, so the plan appears to be on track.

A series of restructuring actions over the last few years has driven this improvement. During the pandemic the company had expanded operations, taking in extra hands to deal with the surging traffic. Between Aug 2022 and Mar 2025, it cut back over 5000 positions net of relocations, flattening the organizational structure to speed up decision making and reduce cost. AI adoption helped eliminate over 300 positions. It also exited German operations citing better prospects in the U.S., Canada, UK and Ireland. The result was a concentration of resources on initiatives that were likely to yield the highest returns.

With a leaner operating structure and stronger revenue growth outlook, Wayfair looks poised for continued growth. Recent results were mainly driven by share gains as the housing market to which it is tied remains sluggish. While it appears that interest rates will not come down further any time soon, this would be an additional catalyst, as it would bring mortgage rates down and large-scale home buying would return.

Analysts are clearly optimistic about Wayfair. The company certainly has a great track record of beating estimates, posting positive surprises in three of the last four quarters, at an average rate of 56.7%. For 2026, analysts expect 5.6% revenue growth and 11.9% earnings growth. For 2027, revenue and earnings growth are expected to be a respective 5.9% and 29.6%. In the last 30 days, analyst estimates for 2026 and 2027 have increased 12 cents (4.3%) and a penny (less than a percentage point).

The shares of this Zacks Rank #1 (Strong Buy) company’s shares are up 59.6% over the past year.

Price & Consensus: W

Image Source: Zacks Investment Research

Carvana Co. (CVNA - Free Report) : Tempe, AZ-based Carvana, through its website and mobile app, is America’s leading online marketplace for used cars. The entire transaction, from browsing inventory, financing, and purchasing vehicle protection products and insurance, is completed online with options for home delivery or pick up at a car vending machine. Following the acquisition of ADESA’s U.S. auction business, it also operates a nationwide logistics network, as well as vehicle auction, inspection and reconditioning facilities.

Carvana reported very strong quarterly results wherein unit volumes grew 40% (the sixth straight quarter of 40%+ growth) as the company continued to take share in a market that was essentially flat in the last quarter. The focus on its vertically integrated operating model and use of technology to improve customer experience helped it take share. While wholesale prices increased rapidly during the quarter, there was the typical lag in passing these on at retail, which compressed wholesale-to-retail spreads, hurting margins.

The company also stands to benefit from any improvement in the interest rate. Lower interest rates would bring more buyers into the market, and many replacement buyers would be likely to trade in their vehicles, adding to the used-car supply. Additionally, the used vehicle market in the U.S. is much larger than the new vehicle market, as used cars are much cheaper. As a result, affordability considerations are likely to drive a substantial portion of replacement demand toward used vehicles.

New vehicle production has largely recovered from the pandemic era disruption and new vehicle sales are expected to remain steady going forward. This, together with continued improvement in trade-in activity, should gradually replenish the supply of late-model used vehicles and create a healthier marketplace for both buyers and sellers.

Analysts are optimistic about double-digit revenue growth both this year and the next although the earnings growth rate is expected to decline a bit this year. Of course, actual growth rates may end up higher. Carvana certainly has a good track record of beating estimates: beating estimates in three of the last four quarters at an average rate of 71.6%.

For 2026, analysts expect 38.5% revenue growth and -6.5% earnings growth. For 2027, revenue and earnings growth are expected to be a respective 25.7% and 34.5%. In the last 60 days, analyst estimates for 2026 and 2027 have increased 5 cents (3.3%) and 4 cents (1.9%), respectively.

The shares of this Zacks Rank #2 company are down 5.2% over the past year.

Price & Consensus: CVNA

Image Source: Zacks Investment Research

Key Takeaways Carvana expects Q2 retail GPU to improve sequentially but remain below the prior-year level.CVNA cites lost tariff benefits, lower shipping fees and higher non-vehicle costs as key headwinds.Carvana also expects narrower wholesale-to-retail spreads to reduce retail GPU by about $100-$200 per unit. Carvana Co.’s (CVNA - Free Report) retail gross profit per unit (GPU) was relatively stable in the first quarter of 2026 but declined slightly from the prior-year period. A key factor behind the decline was the company's continued success in optimizing its logistics network, enabling faster vehicle deliveries over shorter distances. This improvement helped reduce logistics expense per retail unit sold to an all-time low.

As outbound shipping distances declined, Carvana also lowered the shipping fees charged to customers, passing the cost savings directly to them. While this enhanced customer value, it negatively affected retail GPU in both the fourth quarter of the previous year and the first quarter of the current year. Consequently, non-GAAP retail GPU declined by $58 year over year, primarily due to higher non-vehicle costs and lower shipping fee revenues.

Looking ahead, the company expects retail GPU to improve sequentially in the second quarter but remain below the prior-year level. The anticipated year-over-year decline reflects the absence of approximately $100 per unit in tariff-related benefits that supported results last year, continued pressure from lower shipping fees and higher non-vehicle costs, as well as an estimated $100-$200 per unit impact from narrower wholesale-to-retail spreads across the industry.

Meanwhile, non-GAAP wholesale GPU decreased by $83 year over year. Although wholesale vehicle volumes increased and gross profit per unit improved, these gains were more than offset by lower marketplace gross profit and retail unit growth that outpaced wholesale gross profit. Non-GAAP other GPU also declined by $88, primarily because the company chose to pass value back to customers through lower interest rates, partially offset by higher finance product and vehicle service contract attachment rates. CVNA currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GPU Outlook of Other Auto RetailersGroup 1 Automotive, Inc.’s (GPI - Free Report) profitability across both new and used vehicle segments remains under pressure. In the last reported quarter, Group 1’s new-vehicle gross profit per unit slipped 2.5% to $3,296, and used-vehicle GPU fell 1.9% to $1,540. As inventory levels normalize and incentives increase, maintaining pricing discipline is likely to become more challenging for Group 1, which could continue to weigh on margins and overall earnings.

AutoNation, Inc. (AN - Free Report) new-vehicle profitability remains vulnerable to shifts in OEM incentives, vehicle mix and volatility in Premium Luxury volume. In the first quarter of 2026, AutoNation’s new vehicle gross profit per unit was $2,514, down from $2,803 a year ago, reflecting a weaker year-over-year pricing environment. BEV unit sales declined more than 50% year over year, with a disproportionate impact in Premium Luxury, where units fell 16% year over year. Amid affordability and inflation concerns, AutoNation expects vehicle demand to remain under pressure and has warned of margin compression this year.

Carvana’s Price Performance, Valuation and EstimatesCarvana has underperformed the Zacks Internet – Commerce industry in the last six months. CVNA shares have plunged 28.6% compared with the industry’s decline of 7.3%.

Image Source: Zacks Investment Research

 
From a valuation perspective, Carvana appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 2.28, higher than its industry’s 1.91.

Image Source: Zacks Investment Research

 
The Zacks Consensus Estimate for Carvana’s 2026 and 2027 EPS has moved up 5 cents and 4 cents, respectively, in the past 60 days. 

Image Source: Zacks Investment Research

Key Takeaways Carvana's integrated retail system connects buying, reconditioning, listing and delivery in one process. CVNA uses ADESA Clear to support wholesale vehicle purchases and sells most wholesale inventory.Carvana is investing in technology, logistics and operations to improve efficiency and support growth. Carvana Co.’s (CVNA - Free Report) digital wholesale auction platform, ADESA Clear, has evolved into a key component of its operating model, with continued improvements in quality, scale and functionality. The platform is becoming an increasingly important part of Carvana's wholesale operations, supporting the purchase of vehicles through wholesale channels and the sale of most of those vehicles via ADESA Clear.

The company's long-term strategy centers on building a fully integrated automotive retail system that delivers a seamless customer experience for both sellers and buyers while minimizing the costs involved in vehicle transactions. Rather than treating each stage of the process as a separate operation, Carvana has developed an end-to-end system that connects every step, from purchasing a used vehicle to delivering it to its next owner. This integrated approach is designed to improve speed, reduce operational complexity and enhance overall efficiency.

One example of these operational improvements is Carvana's ability to complete the entire retail cycle in as little as 4.8 days. The process begins when a customer receives an online valuation for their vehicle and decides to sell it. It is followed by identity verification, title processing and scheduling either a vehicle pickup or customer drop-off. After receiving the vehicle, Carvana transports it to one of its inspection and reconditioning centers, where technicians evaluate its condition, perform the necessary repairs and prepare it for resale. The vehicle is then photographed, priced using automated systems and listed on the company's online marketplace.

Once another customer selects the vehicle, the purchase process is completed digitally, followed by delivery scheduling and transportation to the buyer. Completing all of these steps, from acquisition to final delivery, in less than five days highlights the efficiency of Carvana's logistics network, technology platform and reconditioning operations. Continued investments in technology, logistics and operations are aimed at further optimizing the system, improving efficiency and supporting the company's long-term growth. CVNA currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Other automotive retailers are also expanding their digital capabilities to simplify vehicle transactions and strengthen operating performance.

Lithia Motors, Inc.’s (LAD - Free Report) digital platforms, Driveway and GreenCars, are helping boost profitability and expand its market presence. These e-commerce platforms let customers buy, sell and service vehicles online. Early results from Lithia’s investment in Wheels, a top fleet management company, are also strong. Its minority stake in Wheels creates powerful synergies between retail and fleet operations. Together, these moves strengthen Lithia’s mobility ecosystem and support customer retention and long-term profitability.

Group 1 Automotive, Inc. (GPI - Free Report) is steadily improving its sales process through digital tools, moving beyond just generating online leads to closing deals faster and at lower cost. Virtual finance and insurance are now available in about one-third of Group 1’s U.S. stores and handle roughly 20% of deals there, with positive customer feedback and lower compensation costs. At the same time, tools like AcceleRide, along with AI-based scheduling and CRM platforms, are helping Group 1 work more efficiently, improve deal conversions and deliver more consistent performance across its dealerships over time.

Carvana’s Price Performance, Valuation and EstimatesCarvana has underperformed the Zacks Internet – Commerce industry in the last six months. CVNA shares have plunged 27.1% compared with the industry’s decline of 7.2%.

Image Source: Zacks Investment Research

 
From a valuation perspective, Carvana appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 2.32, higher than its industry’s 1.91.

Image Source: Zacks Investment Research

 
The Zacks Consensus Estimate for Carvana’s 2026 and 2027 EPS has moved up 6 cents and 5 cents, respectively, in the past 60 days. 

Image Source: Zacks Investment Research

Carvana NYSE: CVNA delivered a genuinely impressive Q1 2026 earnings report that included a record number of units sold.

Carvana Today

$66.22 -1.69 (-2.49%)

As of 06/25/2026 03:59 PM Eastern

52-Week Range$54.46▼

$97.38P/E Ratio40.28

Price Target$93.14

However, in the two months following the report, CVNA is down approximately 15% despite favorable analyst sentiment. That includes a 10% drop on June 17 in sympathy with cost commentary from CarMax NYSE: KMX, even though Carvana's own unit economics are moving in the opposite direction.

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After the company’s strong Q1 numbers, Carvana still has operational fuel left in the tank. For example, the company’s AI-driven reconditioning tools haven't been rolled out at most facilities, meaning further margin expansion is on the runway.

The company's new Stellantis NYSE: STLA hybrid hub model has also shown early traction. The Casa Grande franchise reportedly went from 30 to 50 units per month to more than 700 after Carvana took it over.

Why Is CVNA Under Pressure?With all these positive factors driving the stock's outlook, why is CVNA under pressure? Some may say the issue is one of valuation. At 41x forward earnings, Carvana is priced like a technology stock. But the company’s innovative, online-only model has been disruptive to a market that wasn’t known for innovation. And, although the company doesn’t have a long history of profitability, the 41x figure is a discount to its historic average.

The company also cited the likelihood of lower gross profit per unit (GPU) in the coming quarter for a variety of reasons, including the year-over-year comparison to last year’s tariff anniversary. But that’s likely to be a one-time event and wouldn’t explain a sell-off that is now over 20% in 2026.

Carvana Is More Sensitive to Financing ConditionsThe real impact on CVNA is likely coming from something outside of its control. Specifically, the near-term direction of U.S. monetary policy. The tone of Federal Reserve chair Kevin Warsh's statements on June 17 did not indicate that he means to move towards an accommodative stance anytime soon.

The CME FedWatch tool agrees. The odds of a rate cut for the rest of 2026 are not even given a percentage. This may not satisfy investors who want to sharpen their pencils and look for a mathematical reason to sell Carvana in the company’s financials. But before dismissing it, here’s something to consider.

For an auto retailer, interest rates matter because auto loan rates are among the stickiest in consumer credit. The average used car APR is well above 11%. Trade-ins increasingly carry negative equity. A consumer who barely qualifies at current rates gets squeezed harder if rates hold or rise

Something else to consider, Carvana's competitor CarMax recently delivered earnings and, despite beating estimates and growing penetration, saw net income drop nearly 12% to $185.6 million as it cut prices to defend volume. Its loan-loss reserve also climbed to 2.95% of loans, up from 2.78%, as the company leaned harder into Tier 2. This is a category of consumers with strong but not top-tier credit who usually qualify for rates that carry a cost premium.

The typical Carvana customer skews to a lower FICO score than CarMax and is more dependent on financing. When rates stay high, marginal buyers are the first to be disqualified, and those are disproportionately Carvana's customers. There's also a K-shaped wrinkle to consider. Upper-leg consumers are still spending, but they're prioritizing travel and experiences over big-ticket vehicle purchases.

That does give fundamental investors something to consider. Restrictive policy compresses growth multiples hardest. At a 41x forward multiple, Carvana needs growth to deliver.

If higher-for-longer rates take $1 of earnings per share (EPS) away from CarMax, it could take 10x off CVNA's multiple. That puts Carvana’s 5-for-1 split last quarter into a different light.

Analysts Remain Bullish, But Technicals Stay WeakInstitutional buying was down sharply in the last quarter, but since the company’s earnings report, analysts have been mostly bullish on CVNA. The Carvana analyst forecasts on MarketBeat show a consensus price target of $93.14 as of June 24, representing a significant gain for investors. However, investors may have to wait until after Carvana reports earnings next month to get a better picture of analyst sentiment.

The CVNA chart shows a stock that continues to be in a downtrend, with recent rallies failing to crack the 200-day simple moving average. A bigger concern for investors may be volume, which is down sharply. The MACD also remains below its signal line, with the histogram near zero. There’s simply no real conviction one way or the other, which amplifies short interest of around 7%, which in and of itself isn’t bearish.

The next potential catalyst comes with Carvana's Q2 earnings report scheduled for July 29. Until then, CVNA is likely to stay tethered to macro signals rather than its own execution. The numbers say the company’s business model is working. The question is whether the Federal Reserve cooperates before the multiple compresses further.

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DALLAS — Carvana is aiming to bring its online strategy for selling used vehicles to sales of new cars and trucks.

But don't expect the company to actually sell you a vehicle at one of its seven Stellantis franchised dealerships.

Instead, the online vehicle retailer said it intends to use such dealerships as service locations, test-drive centers and potentially "playgrounds" for consumers to decide what vehicle they would like to buy through Carvana's online platforms, marking a stark contrast from how traditional franchised dealers handle new products.

"Every single car that we sell, whether it's used or new, is online," Tom Taira, Carvana president of special projects who's leading the new vehicle operations, told CNBC during an interview at its franchise in Texas. "That's a very inherent difference. Even coming into the store, you're buying it online, and that's a big difference in how people think about it."

Shares of Carvana fell 10% during trading Wednesday, which coincided with CarMax, the company's largest rival, beating Wall Street's quarterly expectations but reporting margin pressure and declining gross profit per retail used vehicle.

Through its used vehicle sales, Carvana has become the most valuable auto retailer in the U.S. with a more than $70 billion market cap. Carvana's target with the new vehicle business is to grow its market share and customer base as well as assist used vehicle sales through trade-ins and other means, according to Taira.

If the company is successful, the strategy could cause a ripple effect across the U.S. franchised dealership model, which the National Automobile Dealers Association says includes 16,990 retailers that topped $1.3 trillion in sales last year.

This week marks the first time Carvana has publicly talked about its plans for new vehicles since it purchased its first Chrysler-Dodge-Jeep-Ram franchised store for Stellantis early last year in Arizona. Its network has since grown to other Carvana-popular markets in Sacramento and San Diego, California; Dallas; Atlanta; Cleveland; and Boston. 

"When we got into new cars, we said the only way we're going to make this happen is to ensure that it goes the Carvana way. That we actually sell cars exactly the same way that we do to used car customers," Taira said during a media event at its Dallas location. "Why break something that already works?"

Carvana spent roughly $171 million on its acquisitions of new Stellantis vehicle franchised dealerships, excluding its most recent purchase of a retailer in Ohio, according to public filings. The company declined to disclose any further investments in the stores to implement its strategy.

Taira and the company also declined to disclose Carvana's new vehicle sales so far or its future expansion plans for additional brands or other Stellantis dealerships. CNBC previously confirmed that the company has quickly grown its new vehicle sales, including a location in Arizona becoming the top-selling dealer in the country for Stellantis.

"We believe that this was worth it to us, as long as we could go out and increase share and increase the pie," Taira said. He declined to comment on whether the new vehicle business is profitable.

To be able to integrate its new vehicle sales into its current website, as first reported by CNBC, Carvana was approved as a certified website provider for Stellantis instead of utilizing mandated third-party companies. Several franchised dealers said they believed that was a unique benefit for Carvana.

Stellantis, in an statement to CNBC, said Carvana operates as a "corporate owner" of its brands, similarly to other large publicly traded companies such as Lithia and AutoNation. 

"We apply the same consistent standards and criteria to all dealer partners, and any organization that meets our qualifications is eligible to operate as a franchisee," the automaker said, adding that Stellantis "certifies tools and services that will enhance our program and be beneficial to our network. All certified providers must complete a rigorous onboarding process and meet program standards and requirement."

Test-drives, vehicle 'playground'Carvana is using a location in Dallas as a test center for its foray into new vehicle sales. The facility looks like a traditional Stellantis dealership from the outside, but the consumer process for purchasing a vehicle and the responsibilities of its employees are unprecedented.

Couches and chairs replace cubicles and sales offices. There are no finance and insurance departments, and instead of an army of commission-based employees, the facility has associates that are paid hourly to assist customers — if they want the help.

The experience is meant to be as self-guided as a customer wants. By scanning QR codes located on 10-foot-by-10-foot screens inside the building or on vehicles and displays outside, shoppers can customize a vehicle, learn about a product's features and conduct test-drives before deciding whether to purchase anything. If they do decide to buy something, it's online and not originated from a sales person, the company said.

The playground has roughly 50 vehicles divided by brand, with each having a theme. Jeep has an off-road display. Dodge has race tracks, including a Carvana-themed Charger pace car and part of a traditional track fence barrier. Chrysler minivans, meanwhile, have a soccer net and Ram's area is truck-centric.

Carvana is not committing to expanding the exact experience to its other franchised dealer locations, but Taira told CNBC that the overall process of online sales, vehicle testing and service are expected to be consistent throughout the locations.

"I think the business case and the case for additional stores comes out through this location first," he told CNBC, adding that it built out the store in weeks. "Is it important for us to launch a second? No, I think what's important is that we get this right. … There's no giant plan to build test-drive centers everywhere."

Vehicle inventory constraintsOnce a customer decides to test-drive or even purchases a vehicle from the location, that's where the process can get more complex, depending on what model a consumer wants.

Taira said the company chose to purchase Stellantis dealerships for the automaker's breadth of brands as well as its variety of products, which can be a double-edged sword when it comes to consumers actually finding the exact vehicle they want to test-drive or purchase.

Unlike a traditional dealership that stockpiles vehicles for customers to test-drive before purchasing, at the Texas facility, Carvana has roughly 50 display cars on its playground, with twin vehicles for test-drives. It had roughly 3,000 new vehicles for sale nationwide compared with more than 60,000 used models as of Wednesday morning, according to its website.

This means that a customer may not be able to test-drive the exact vehicle or even model they're purchasing, but the online process tries to match the best test-drive vehicle possible with what they want. It also describes what's the same and what's different.

Carvana's stock over five years.

Looking at the Texas location's system for vehicles such as an $87,000 Ram 1500 RHO performance model, the closest thing on-site for a test-drive was a roughly $61,000 Ram 1500 Big Horn with the same interior and four-door configuration but no other feature matches, including its performance engine.

It's why traditional automotive dealers have large vehicle inventories, especially for pickup trucks that have a litany of build options and wide bandwidth of performance specs.

Taira said Carvana is continuing to take lessons learned from its year-plus experience of selling new vehicles into its day-to-day operations. He said the company is learning what vehicles to keep in stock and is working to ensure customers know they are buying a new vehicle rather than a used one.

"We're going through all this technology. This is brand new," Taira said. "All these things are active, meaning the amount of progression we're going to make over the course of the next days to weeks to months."

Taira said the company prioritizes new vehicle sales to local customers, much like it does for used vehicles, to avoid additional costs, but it does use its nationwide logistics network and more than 100 U.S. Carvana locations when necessary.

Carvana will service vehiclesA major question of Stellantis franchised dealers and Wall Street analysts before Carvana revealed its new vehicle plans was how the company planned to service the new products it sells.

Taira said the company, for the time being, will operationally run its service departments like a traditional franchised dealer, but with its guiding strategy of transparent, nonhaggling pricing and "hassle-free" customer experience.

"As it relates to how you actually do service, they're traditional. It's a traditional setup in that way," he told CNBC. "In that way, what we're doing … as it relates to service, we believe the same principles that we have with selling cars."

At the end of the day, selling cars is Carvana's core business, but servicing vehicles has historically been a lucrative market for franchised dealers, along with customer financing, which Carvana has always focused on for its business.

Much like its used vehicles, Carvana is currently only accepting cash or offering financing through the company itself, including selling consumer auto loans it originates to institutional investors and partner banks, such as Ally Financial, to maintain liquidity.

Taira did not dismiss the possibility of Carvana offering leasing or using Stellantis' financial services, which have been highly profitable for automakers, but said the offerings would need to seamlessly integrate into its current online selling platforms.

"Part of what makes this great, this experience, is what we already know. What we already know is the system that we have in place," he said. "That does not mean that integration isn't something that we're going to be [doing] as part of our learning and experimentation going forward."