Track market-moving stories before they get noisy

Wall Street analysts forecast that Carvana (CVNA - Free Report) will report quarterly earnings of $0.42 per share in its upcoming release, pointing to a year-over-year increase of 61.5%. It is anticipated that revenues will amount to $6.97 billion, exhibiting an increase of 43.9% compared to the year-ago quarter.

The consensus EPS estimate for the quarter has undergone a downward revision of 0.3% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.

Before a company reveals its earnings, it is vital to take into account any changes in earnings projections. These revisions play a pivotal role in predicting the possible reactions of investors toward the stock. Multiple empirical studies have consistently shown a strong association between trends in earnings estimates and the short-term price movements of a stock.

While investors typically use consensus earnings and revenue estimates as a yardstick to evaluate the company's quarterly performance, scrutinizing analysts' projections for some of the company's key metrics can offer a more comprehensive perspective.

Bearing this in mind, let's now explore the average estimates of specific Carvana metrics that are commonly monitored and projected by Wall Street analysts.

Based on the collective assessment of analysts, 'Sales and operating revenues- Retail vehicle sales, net' should arrive at $4.97 billion. The estimate suggests a change of +46% year over year.

The combined assessment of analysts suggests that 'Sales and operating revenues- Other sales and revenues' will likely reach $559.44 million. The estimate indicates a change of +36.1% from the prior-year quarter.

Analysts expect 'Sales and operating revenues- Wholesale sales and revenues' to come in at $1.28 billion. The estimate suggests a change of +25% year over year.

Analysts predict that the 'Per retail unit gross profit - Total' will reach $6796.56 . The estimate compares to the year-ago value of $7426.00 .

It is projected by analysts that the 'Unit sales - Retail vehicle unit sales' will reach 198,190 . The estimate is in contrast to the year-ago figure of 143,280 .

The consensus estimate for 'Per retail unit gross profit - Retail vehicle' stands at $3282.16 . Compared to the current estimate, the company reported $3636.00 in the same quarter of the previous year.

Analysts forecast 'Per retail unit gross profit - Other' to reach $2853.86 . The estimate is in contrast to the year-ago figure of $2869.00 .

The average prediction of analysts places 'Per unit revenue - Wholesale vehicles' at $11079.20 . The estimate is in contrast to the year-ago figure of $10746.00 .

The consensus among analysts is that 'Per unit revenue - Retail vehicles' will reach $25395.83 . Compared to the present estimate, the company reported $23765.00 in the same quarter last year.

The collective assessment of analysts points to an estimated 'Unit sales - Wholesale vehicle unit sales' of 97,755 . Compared to the current estimate, the company reported 72,770 in the same quarter of the previous year.

According to the collective judgment of analysts, 'Markets at end of period (metropolitan statistical areas)' should come in at 317 . Compared to the current estimate, the company reported 316 in the same quarter of the previous year.

Analysts' assessment points toward 'Per retail unit gross profit - Wholesale' reaching $952.00 . The estimate is in contrast to the year-ago figure of $921.00 .

View all Key Company Metrics for Carvana here>>>

Over the past month, Carvana shares have recorded returns of -9.1% versus the Zacks S&P 500 composite's +0.6% change. Based on its Zacks Rank #3 (Hold), CVNA will likely exhibit a performance that aligns with the overall market in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Carvana (CVNA -2.76%) turned many investors' heads when it began scooping up brick-and-mortar dealerships recently. The strategic move seemed to go against the entire company's vision of online used-car sales (we'll get into that in a second). A smaller detail many overlooked was that Carvana opted to buy Stellantis (STLA +0.26%) dealerships primarily, a strange decision given the automaker's long list of recent struggles and receding market share. That said, this strange pairing might just be a match made in heaven for Carvana, and here's why.

What's going on? At first glance, Carvana scooping up physical dealerships goes against its historic strategy, but in reality, it's attempting to disrupt the age-old dealership model as we know it. As it attempts this strategic pivot, there's also reason to believe the synergy created could reward investors.

Jeep will play a big role in reversing market share losses. Image source: Stellantis.

Carvana's physical dealerships still won't sell you a vehicle in person; instead, they're for test drives, showing car capabilities, and helping consumers buy from a larger selection online. What this strategy also does is give Carvana control of the entire trade-in lifecycle. One of the more challenging aspects for Carvana was bringing in valuable used-vehicle inventory. Controlling dealerships that allow consumers to bring trade-in vehicles when purchasing new ones gives Carvana a bloodline of used-vehicle inventory to boost its historical business.

Another aspect of this strategy is that Carvana's acquired dealerships still plan to use the service bay as usual, potentially unlocking additional service revenue from its consumer base that may want to continue doing business with Carvana. What some investors aren't aware of is that while new and used vehicles drive dealerships' top-line revenue, the most profitable aspects, by a large margin, are service and parts, and finance and insurance. Carvana is unlocking the bread-and-butter of dealerships that its traditional online-only business lacked: high-margin maintenance and repair.

The initial results are incredibly intriguing, with its Arizona store booming in sales and becoming a top-selling dealership. More specifically, according to reports from The Wall Street Journal, Carvana's recently purchased Arizona dealership went from averaging 30 to 50 monthly sales to selling more than 700 new vehicles in May, according to Stellantis figures given to CNBC.

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Here's why it's a great match While Stellantis would surely benefit from increased sales across many dealerships, the match is primarily important to Carvana. That's because, at least initially, Carvana has chosen to make Stellantis dealerships its primary purchase. The question is why. The old saying "Buy low, sell high" is a fitting one for this scenario. Stellantis has experienced executive turnover, including the appointment of a new CEO, and it recently unveiled a massive $70 billion global turnaround plan with a strong focus on North America.

Stellantis has faced seemingly endless questions over the past few years about its product decisions, shrinking product lineups, receding market share, delayed launches, and uncertainty about the future of some of its many brands. That story is likely to change over the next five years as 11 new vehicles are headed to the U.S. market as Stellantis is committing 70% of its future investment into four primary brands. Two of them -- Ram and Jeep -- are focused on turning around Stellantis' North America market.

Furthermore, a growing concern has been rising new-car prices. Some analysts have called this an affordability crisis. This gives Stellantis, and by extension Carvana, the opportunity to quickly boost sales from the growing consumer demand for more affordable vehicles. In fact, at least nine upcoming models are targeting launch prices starting under $40,000, and two are targeting under $30,000. Stellantis' reduced focus on less-profitable, typically pricier electric vehicles (EVs) could also help Carvana's early efforts in the new-car business.

What it all means for Stellantis and Carvana At the same time, Stellantis' struggles have given Carvana an opportunity to purchase dealerships at lower prices than in the past. It also strategically pivots to a company putting up tens of billions to revive market share, product lineups, and brand identity. You could argue that Stellantis, because of its massive investment and potential turnaround, could be the best dealership partner over the next five years as Carvana fine-tunes its new strategy to disrupt the industry.

It's certainly a strange pairing, considering Carvana's history of used-car and online-only sales, but it might just be a match made in heaven over the next five years, especially if early results continue. As far as these two companies go, this is a much bigger deal for Carvana. Not only is it perhaps timing the brands of physical dealerships perfectly, considering Stellantis' upcoming massive investment in product and branding, Carvana opening the doors to new-car sales will give it entirely new revenue and profit streams, including servicing that is higher margin, that its historical business has lacked. If Carvana executes its strategy and disrupts the new-car dealership model, its earnings and stock price could soar over the next five years.

Key Takeaways Carvana's retail units surged 40% in Q1 2026, while Sonic expands across auto and powersports.Carvana's ADESA network supports growth, but heavy debt and spending could pressure profitability.Sonic's 2026 EchoPark EBITDA guidance assumes used-vehicle supply and pricing to gradually normalize. Carvana Co. (CVNA - Free Report) and Sonic Automotive, Inc. (SAH - Free Report) are both automotive retailers in the United States. Carvana has transformed car buying with a convenient online experience, letting customers browse used cars from home and choose home delivery or pickup at its iconic car vending machines. Carvana’s end-to-end online business model covers every aspect of used-car retailing, including sales, financing, logistics, inspection and repair centers, as well as software development.

Sonic pursues an omnichannel model and sells new and used cars and light trucks. It offers warranties, service contracts, vehicle financing and insurance. Further, it provides maintenance and repair services, and sells replacement parts and aftermarket automotive products.

Let’s dig deeper and compare the fundamentals of these two auto retailers to determine which is the better investment choice now.

The Case for CVNA StockThe ADESA U.S. acquisition continues to deepen Carvana’s logistics, auction and reconditioning network. As of the first quarter of 2026, Carvana had 16 ADESA integrated sites alongside its inspection and reconditioning centers, and it expects to integrate another 6 to 8 ADESA sites during 2026. The company is also expanding ADESA Clear as its digital wholesale platform. These initiatives increase inventory mobility and expand production options, which can support volume growth while keeping reconditioning buildouts more capital efficient.

ADESA recently announced the launch of ADESA Timed, an enhancement to its digital wholesale platform that enables financial institutions, fleets, rental companies and dealer groups to sell inventory through self-service timed digital auctions using the same technology and tools as ADESA Clear.

The e-commerce platform expects a sequential increase in retail units sold in the second quarter of 2026, and it remains on track to deliver growth in retail units for full-year 2026. Retail units sold rose 40% year over year in the first quarter of 2026 to a record 187,393 units, marking another quarter of outsized growth. The market remains highly fragmented, with Carvana’s share still small. This suggests that there is ample room for the company to expand, especially as more consumers gravitate toward online car buying. In the longer term, the company continues to target selling three million cars per year in the 2030 to 2035 time frame.

SG&A leverage remains visible as volume rises, and the company reported reductions in non-GAAP SG&A expense per retail unit sold versus last year. Carvana posted adjusted EBITDA of $672 million in the first quarter of 2026, a company record compared with $488 million in the year-ago period. Looking to the second quarter of 2026, it expects a sequential increase in adjusted EBITDA, and it reiterated its longer-term goal of reaching a 13.5% adjusted EBITDA margin as scale increases and fixed costs are leveraged.

However, Carvana’s debt load remains sizable. As of March 31, 2026, long-term debt was $4.85 billion, up from $4.83 billion as of Dec. 31, 2025. Its debt-to-capital ratio stands at 0.53 compared with the auto sector’s 0.25. Elevated leverage restricts the firm’s flexibility to tap into growth opportunities.

Carvana is still heavily investing in advertising, technology, automation, facilities and AI-related systems. While these investments are intended to support long-term growth, they also create ongoing cost pressure. Overhead expenses are now at a structurally higher level compared to 2025 due to technology and facility investments. Advertising expense per unit also increased as the company continues aggressively promoting its platform. These spending commitments may delay margin expansion if revenue growth slows or if operational gains take longer than expected to materialize.

The Zacks Consensus Estimate for CVNA’s 2026 sales and EPS implies year-over-year growth of 39.2% and a decline of 3%, respectively. EPS estimates for 2026 have improved by a penny in the past seven days. EPS estimates for 2027 have declined 2 cents in the past seven days.

Image Source: Zacks Investment Research

The Case for SAH StockThe buyout of RFJ Auto Partners, completed in 2021, expanded Sonic Automotive’s reach and helped it become one of the top five U.S. dealership groups. In the second quarter of 2025, Sonic acquired four Jaguar and Land Rover dealerships in California and became the largest U.S. retailer of these brands.

Moreover, the acquisition of five Harley-Davidson dealerships has strengthened its diversification strategy and expanded its exposure to the faster-growing powersports retail market. The deal lifts Sonic Powersports to 20 rooftops and 46 franchises, including nine full-service Harley-Davidson dealerships, positioning the unit among the top five U.S. powersports dealer groups. This comes after record 2025 company revenues of $15.2 billion and Powersports revenues of $202.9 million with $11.5 million in adjusted EBITDA, suggesting the segment is scaling from a stronger financial base. Broader brand coverage and entry into active riding markets should support incremental sales, service, parts and merchandise opportunities. The company expects 2026 Powersports adjusted EBITDA to be in the range of $14 to $17 million compared with $11.5 million in 2025.

Sonic’s EchoPark segment operates independently from the franchised dealerships business, sells used cars and light trucks and arranges Finance & Insurance product sales for customers in pre-owned vehicle specialty retail locations. In the first quarter of 2026, EchoPark revenues increased 4% year over year to $580.5 million and adjusted EBITDA reached $18.6 million. A gradual increase in used-vehicle supply and more normalized pricing should support demand and lift EchoPark’s retail unit volumes. Sonic is investing in EchoPark’s digital tools, including its app and broader digital retail platform, to support an omnichannel buying process. For 2026, the company expects high single-digit growth in used retail unit sales volume and total GPU of $3,400 to $3,600, and raised adjusted EBITDA guidance to $35 million to $40 million.

However, the company’s stretched balance sheet remains a concern. SAH ended the first quarter of 2026 with $1.5 billion in long-term debt and just $5.7 million. Long-term debt-to-capital is 0.66 versus the industry’s 0.26.

The Zacks Consensus Estimate for SAH’s 2026 sales and EPS implies year-over-year growth of 2.9% and 5.2%, respectively. EPS estimates for 2026 and 2027 have improved 2 cents and 5 cents, respectively, in the past 30 days.

Image Source: Zacks Investment Research

Price Performance of CVNA & SAHCVNA stock has declined 20.2% year to date, while shares of SAH have surged 62.3%. The auto sector has declined 12.2% in the same time frame.

Image Source: Zacks Investment Research

ConclusionWhile Carvana offers stronger growth potential through its scalable e-commerce model, expanding ADESA network and robust retail volume growth, its high debt burden and elevated investments in technology, facilities and advertising could pressure profitability.

In contrast, Sonic benefits from a diversified business model spanning new and used vehicle sales, after-sales services and powersports, while EchoPark provides additional exposure to the growing used-car market. An improved 2026 earnings outlook and stronger EPS growth expectations also enhance prospects. Although Sonic's leverage remains high, its broader revenue base and diversification provide greater stability.

SAH carries a Zacks Rank #2 (Buy), while CVNA has a Zacks Rank #3 (Hold). Moreover, with shares already up sharply, the market appears to recognize Sonic's improving fundamentals, making it a more balanced investment option. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Posted by Defense World Staff on Jul 19th, 2026

Fifth Third Bancorp raised its position in Carvana Co. (NYSE:CVNA – Free Report) by 3,547.9% in the first quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 14,154 shares of the company’s stock after buying an additional 13,766 shares during the period. Fifth Third Bancorp’s holdings in Carvana were worth $4,450,000 at the end of the most recent quarter.

Other hedge funds have also made changes to their positions in the company. Sequoia Financial Advisors LLC grew its stake in Carvana by 6.8% in the first quarter. Sequoia Financial Advisors LLC now owns 3,739 shares of the company’s stock worth $1,175,000 after purchasing an additional 237 shares in the last quarter. Hsbc Holdings PLC grew its position in shares of Carvana by 6.3% during the first quarter. Hsbc Holdings PLC now owns 235,769 shares of the company’s stock worth $73,820,000 after acquiring an additional 14,042 shares during the last quarter. Whipplewood Advisors LLC acquired a new stake in shares of Carvana in the first quarter valued at approximately $36,000. Resona Asset Management Co. Ltd. increased its stake in shares of Carvana by 4.1% in the first quarter. Resona Asset Management Co. Ltd. now owns 40,772 shares of the company’s stock valued at $12,634,000 after purchasing an additional 1,603 shares during the period. Finally, Mitsubishi UFJ Morgan Stanley Securities Co. Ltd. bought a new stake in shares of Carvana during the first quarter valued at approximately $326,000. Institutional investors and hedge funds own 56.71% of the company’s stock.

Carvana Price Performance NYSE CVNA opened at $67.50 on Friday. Carvana Co. has a twelve month low of $54.46 and a twelve month high of $97.38. The company has a debt-to-equity ratio of 1.05, a quick ratio of 2.57 and a current ratio of 4.09. The stock has a market capitalization of $74.04 billion, a PE ratio of 41.06, a P/E/G ratio of 11.34 and a beta of 3.46. The stock has a 50-day simple moving average of $67.86 and a 200 day simple moving average of $72.29.

Carvana (NYSE:CVNA – Get Free Report) last announced its earnings results on Wednesday, April 29th. The company reported $1.69 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.32 by $1.37. Carvana had a net margin of 6.40% and a return on equity of 41.46%. The business had revenue of $6.43 billion for the quarter, compared to analyst estimates of $6.12 billion. Research analysts anticipate that Carvana Co. will post 1.58 EPS for the current year.

Key Headlines Impacting Carvana Here are the key news stories impacting Carvana this week:

Negative Sentiment: Zacks Research downgraded Carvana (CVNA) from strong-buy to hold, a step that can dampen investor confidence. Article Title Negative Sentiment: Analysts lowered earnings estimates for several upcoming periods, including FY2027 and FY2028, suggesting expectations for slower profit growth than previously projected. Article Title Neutral Sentiment: Despite the cuts, Zacks still expects Carvana to remain profitable, with consensus full-year earnings estimated at $1.58 per share and longer-term EPS forecasts still pointing higher. Article Title Wall Street Analyst Weigh In Several research firms recently weighed in on CVNA. UBS Group reaffirmed a “buy” rating and issued a $104.00 price objective (up from $97.00) on shares of Carvana in a report on Thursday, April 30th. Citigroup reiterated an “outperform” rating on shares of Carvana in a research report on Friday, May 1st. Morgan Stanley raised their price objective on Carvana from $90.00 to $102.00 and gave the stock an “overweight” rating in a research note on Thursday, April 30th. BNP Paribas Exane lifted their target price on Carvana from $77.60 to $85.80 in a report on Thursday, April 30th. Finally, Deutsche Bank Aktiengesellschaft reaffirmed a “buy” rating and set a $107.40 target price on shares of Carvana in a research report on Thursday, April 30th. One analyst has rated the stock with a Strong Buy rating, seventeen have assigned a Buy rating and six have issued a Hold rating to the company. According to MarketBeat.com, Carvana presently has an average rating of “Moderate Buy” and a consensus price target of $92.92.

Check Out Our Latest Analysis on CVNA

Insiders Place Their Bets In other news, COO Benjamin E. Huston sold 50,000 shares of the firm’s stock in a transaction dated Friday, May 1st. The shares were sold at an average price of $76.99, for a total transaction of $3,849,600.00. Following the completion of the transaction, the chief operating officer directly owned 529,810 shares of the company’s stock, valued at approximately $40,791,131.52. This trade represents a 8.62% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Ira J. Platt sold 15,000 shares of Carvana stock in a transaction dated Monday, June 15th. The shares were sold at an average price of $67.83, for a total transaction of $1,017,450.00. Following the sale, the director owned 186,470 shares in the company, valued at approximately $12,648,260.10. This trade represents a 7.45% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 396,962 shares of company stock valued at $28,525,088 in the last ninety days. 15.19% of the stock is currently owned by insiders.

Carvana Company Profile (Free Report)

Carvana Co is an online-only retailer of used vehicles that operates a consumer-facing e-commerce platform for buying and selling cars. The company markets and sells inspected, reconditioned pre-owned vehicles through its website, where shoppers can browse inventory, view detailed 360-degree photos and vehicle history reports, finance purchases, and arrange delivery or pickup. Carvana’s model is built around a digital end-to-end car buying experience that aims to simplify vehicle transactions compared with traditional dealerships.

Its products and services include direct retail sales of used cars, trade-in and purchase offers for consumer vehicles, vehicle financing and related protection products, and a seven-day return policy that allows customers to test a vehicle in everyday use.

Further Reading Five stocks we like better than Carvana Netflix May Be Cheap Enough to Tempt Buyers After Earnings Drop Delta vs. United: Which Airline Is Better Built for Higher Fuel Costs? The Market Sold Alcoa After Earnings—But It May Be Missing the Real Story Why Intuitive Surgical’s Strong Quarter Still Spooked Investors Want to see what other hedge funds are holding CVNA? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Carvana Co. (NYSE:CVNA – Free Report).

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In the latest trading session, Carvana (CVNA - Free Report) closed at $67.34, marking a -4.7% move from the previous day. The stock's change was less than the S&P 500's daily loss of 1.01%. Elsewhere, the Dow saw a downswing of 0.77%, while the tech-heavy Nasdaq depreciated by 1.4%.

Heading into today, shares of the company had gained 6.16% over the past month, outpacing the Retail-Wholesale sector's gain of 0.78% and the S&P 500's gain of 0.32%.

The investment community will be paying close attention to the earnings performance of Carvana in its upcoming release. The company is slated to reveal its earnings on July 29, 2026. In that report, analysts expect Carvana to post earnings of $0.42 per share. This would mark year-over-year growth of 61.54%. Meanwhile, our latest consensus estimate is calling for revenue of $6.96 billion, up 43.8% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.58 per share and a revenue of $28.29 billion, indicating changes of -6.51% and +39.19%, respectively, from the former year.

Investors should also take note of any recent adjustments to analyst estimates for Carvana. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.19% higher within the past month. Carvana is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Carvana has a Forward P/E ratio of 44.64 right now. This indicates a premium in contrast to its industry's Forward P/E of 17.3.

We can also see that CVNA currently has a PEG ratio of 11.9. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Commerce was holding an average PEG ratio of 1.1 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 170, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

For Immediate ReleaseChicago, IL – July 14, 2026 – Today, Zacks Equity Research Wayfair (W - Free Report) and Carvana (CVNA - Free Report) .

Industry: eCommerce

Link:

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 e-commerce 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  and Carvana 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 IndustryInternet - 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 WeaknessThe 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 ModerateOver 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.

Industry Somewhat UndervaluedOver 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.

2 Stocks to Add to Your PortfolioThere 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.

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.

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It's a shame that Carvana (CVNA 1.92%) doesn't have its headquarters in Las Vegas, because it's been quite a magic show. Years ago, there were legitimate questions about whether the company was heading into bankruptcy. Then, through a series of moves, management turned everything around and began to thrive as consumers adopted the online-sales strategy. If you had invested $10,000 in Carvana three years ago, it would be worth over $140,000 now.

For its next magic trick, the company is going to scoop up a bunch of brick-and-mortar dealerships, expand into new-car sales, and refuse to sell you a vehicle in person. Sounds crazy, right? My prediction to the rest of the industry: It's going to work scarily well.

What's the scoop? Ask any used-car retailer, and they'll probably tell you Carvana has built a better mousetrap and disrupted its industry. Evidence backs that up: The company's $70 billion market capitalization makes it the most valuable auto retailer in the U.S.

Carvana spent $171 million to buy seven Stellantis dealerships as its way to break into new-car sales for incremental revenue and profits, but it's so much more than that. And, just as importantly, it isn't breaking away from its online-sales mousetrap that has worked so well.

Jeep would become a big brand for Carvana new-car sales. Image source: Stellantis.

If you want to buy a new car in person, spend all day at a dealership, haggle with commission-based salespeople, and work through paperwork for financing, then go across the street. But Carvana is replacing stereotypical salespeople and offices; instead, it will have couches and chairs and a small staff only to help if you need advice browsing its online selection, customizing options online, or test-driving vehicles.

Essentially, the auto dealer is removing much of the overhead for a typical new-car sales process, and this is important. What most investors might not know is that selling new cars isn't the lucrative part of owning a dealership. Since Carvana hasn't opened its books for this new business segment, let's use AutoNation as a benchmark of a huge auto retailer that has opened its books.

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During the first quarter of 2026, new and used vehicles combined to generate 76% of AutoNation's total revenue, and yet those two segments combined to generate only 22% of gross profit. The lucrative part of owning a dealership comes from two other segments: parts and service (P&S), and finance and insurance (F&I). Those two segments generated only 24% of AutoNation's first-quarter total revenue, but 78% of total gross profit.

The good news is that Carvana is offering financing online through its own loans backed by Ally Financial, and its dealerships' service bays will continue to operate as normal.

There already is evidence it's working The first new-car dealership purchased by Carvana is in Casa Grande, Arizona, and it has grown impressively. According to Stellantis data shared with CNBC, that one dealership sold over 700 new vehicles in May. That dwarfs the same store's prior average of between 30 to 50 new vehicle sales before Carvana took over, per The Wall Street Journal.

It gets better, too, because while Carvana's used-car business is already lucrative, the company still needs to get its hands on more valuable inventory, and consumers trading in vehicles checks that box.

Any questions? There are still many questions to answer. Can Carvana cut enough new-car sales overhead to improve the profitability of this segment beyond that of traditional dealerships? Can management find a way to synergize its huge online used-car business with a handful of brick-and-mortar new-car dealerships? Will it consider expanding its handful of dealerships beyond Stellantis?

My prediction is that Carvana's Arizona store is not a one-hit wonder, and its online-sales strategy will work and disrupt the legacy 16,990 new-car retailers and their $1.3 trillion market. While it's doing that, it's going to synergize new and old parts of its business, generate new revenue streams, build its competitive advantages, expand its shipping points and reach, and evolve into a more lucrative overall business.

Despite refusing to sell you a new vehicle in person, Carvana's new-car mousetrap makes a lot of business sense.

Key Takeaways Carvana is down 20% YTD despite six straight quarters of at least 40% unit sales growth.Adjusted EBITDA hit a record $672 million, with an industry-leading margin of 10.4%.ADESA integration, digital tools and a fragmented market support Carvana's long-term expansion. Used car e-retailer Carvana Inc. (CVNA - Free Report) had an impressive run on the bourses last year, being the top-performing auto retail stock of 2025. While CVNA stock more than doubled last year, it has declined 20% so far this year. Carvana has also underperformed the industry as well as peers like CarMax (KMX - Free Report) and Sonic Automotive (SAH - Free Report) year to date. Shares of CarMax and Sonic Automotive have surged 32% and 56%, respectively, over the same timeframe.

YTD Price Performance Comparison  Image Source: Zacks Investment Research

While short-seller accusations and stiff competition have weighed on the stock lately, Carvana’s journey has been nothing short of a rollercoaster. From being on the brink of a collapse in 2022, Carvana has been making tangible progress on operational and financial fronts and is now the second-largest used car retailer in the United States, just behind CarMax.

So, is this a good time to buy CVNA shares? Or should you be waiting on the sidelines? Let’s find out.

What’s Working in Favor of Carvana?Instead of relying on a network of physical dealerships, the company operates a fully digital platform where customers can browse vehicles, arrange financing and schedule delivery online. Its well-known car vending machines are helping the brand stand out in a crowded market.The used car market remains highly fragmented, with Carvana’s share still below 2%. This suggests that there is ample room for the company to expand, especially as more consumers gravitate toward online car buying. In the longer term, the company continues to target selling 3 million cars per year in the 2030 to 2035 timeframe.

The first quarter of 2026 was the sixth straight quarter of Carvana achieving 40% or greater year-over-year unit sales growth. The company expects a sequential increase in retail units sold in the second quarter of 2026, and it remains on track to deliver growth in retail units for full-year 2026.

Financial performance is also improving. Adjusted EBITDA reached a record $672 million in the last reported quarter, compared with $488 million in the year-ago period, with industry-leading margins of 10.4%.

Image Source: Carvana, Inc.

For the second quarter of 2026, Carvana expects a sequential increase in adjusted EBITDA. Its longer-term goal of reaching a 13.5% adjusted EBITDA margin further instills optimism.

Beyond growth and margins, Carvana is strengthening the operational backbone needed to support its long-term expansion. Proprietary technology platforms such as Carli and centralized planning tools help optimize staffing, logistics, workflow and throughput across reconditioning centers. By combining real-time operational data with software-driven decision-making, these systems improve productivity, simplify employee training and enable faster scaling as volumes increase.

The company is also expanding its physical infrastructure. The ADESA U.S. acquisition continues to strengthen Carvana's logistics, auction and reconditioning network. As of the first quarter of 2026, the company had integrated 16 ADESA sites and plans to add another six to eight during 2026. Meanwhile, the expansion of the ADESA Clear wholesale platform is improving inventory mobility and production flexibility, supporting higher sales volumes while keeping future reconditioning investments more capital efficient.

Image Source: Carvana, Inc.

How to Play CVNA NowCarvana has evolved from a turnaround story into a profitable growth company with a scalable digital-first model. Its expanding infrastructure, improving margins and significant runway in the highly fragmented used-car market support a compelling long-term growth narrative. The recent pullback offers a more attractive entry point for investors.

The Zacks Consensus Estimate for Carvana’s 2026 and 2027 sales suggests a year-over-year increase of 38% and 26%, respectively. The consensus mark for 2026 EPS has been revised higher by 5 cents over the past 60 days to $1.58, reflecting improving analyst confidence. For 2027, the EPS estimate is $2.12, implying a 34% increase from the projected 2026 levels.

The Wall Street price target for the stock implies roughly 40% upside from current levels.

Image Source: Zacks Investment Research

CVNA appears well-positioned to outperform over the long run, making the dip look like a buying opportunity rather than a warning sign.

Currently, Carvana carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

In the latest trading session, Carvana (CVNA - Free Report) closed at $66.36, marking a -1.67% move from the previous day. The stock fell short of the S&P 500, which registered a loss of 0.28% for the day. On the other hand, the Dow registered a loss of 1.09%, and the technology-centric Nasdaq increased by 0.2%.

Shares of the company have depreciated by 3.05% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 0.18%, and the S&P 500's gain of 1.64%.

Market participants will be closely following the financial results of Carvana in its upcoming release. The company plans to announce its earnings on July 29, 2026. In that report, analysts expect Carvana to post earnings of $0.42 per share. This would mark year-over-year growth of 61.54%. Meanwhile, the latest consensus estimate predicts the revenue to be $6.9 billion, indicating a 42.6% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates project earnings of $1.58 per share and a revenue of $28.14 billion, demonstrating changes of -6.51% and +38.46%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Carvana. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Carvana currently has a Zacks Rank of #2 (Buy).

In terms of valuation, Carvana is presently being traded at a Forward P/E ratio of 42.72. This denotes a premium relative to the industry average Forward P/E of 17.43.

Also, we should mention that CVNA has a PEG ratio of 11.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Internet - Commerce industry had an average PEG ratio of 1.09.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Carvana (NYSE: CVNA), an industry pioneer for buying and selling cars online, today announced the expansion of same-day vehicle delivery for customers in the gr

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?

Let's take a look at what these Wall Street heavyweights have to say about Carvana (CVNA - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

Carvana currently has an average brokerage recommendation (ABR) of 1.63, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 23 brokerage firms. An ABR of 1.63 approximates between Strong Buy and Buy.

Of the 23 recommendations that derive the current ABR, 14 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 60.9% and 13% of all recommendations.

Brokerage Recommendation Trends for CVNA

Check price target & stock forecast for Carvana here>>>

While the ABR calls for buying Carvana, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Is CVNA Worth Investing In?In terms of earnings estimate revisions for Carvana, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $1.58.

Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Carvana. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Carvana.

PHOENIX--(BUSINESS WIRE)--Carvana (NYSE: CVNA), the industry pioneer for buying and selling cars online, today announced it will report its second quarter 2026 financial results for the period ended June 30, 2026, after the market closes on Wednesday, July 29, 2026. On that day, management will hold a conference call and webcast at 5:30 p.m. ET (2:30 p.m. PT) to review and discuss the company's business and results. The live webcast will be accessible from the Investor Relations section of the c.

In the latest close session, Carvana (CVNA - Free Report) was down 2.52% at $66.20. The stock trailed the S&P 500, which registered a daily loss of 0.01%. Elsewhere, the Dow gained 0.14%, while the tech-heavy Nasdaq lost 0.46%.

The stock of company has fallen by 6.97% in the past month, lagging the Retail-Wholesale sector's loss of 5.64% and the S&P 500's loss of 1.4%.

The investment community will be paying close attention to the earnings performance of Carvana in its upcoming release. The company's upcoming EPS is projected at $0.42, signifying a 61.54% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $6.9 billion, showing a 42.6% escalation compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.58 per share and a revenue of $28.14 billion, signifying shifts of -6.51% and +38.46%, respectively, from the last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Carvana. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Carvana currently has a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Carvana is currently trading at a Forward P/E ratio of 42.98. This denotes a premium relative to the industry average Forward P/E of 17.36.

We can additionally observe that CVNA currently boasts a PEG ratio of 11.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Commerce industry had an average PEG ratio of 1.06 as trading concluded yesterday.

The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 104, placing it within the top 43% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

To say Carvana's (CVNA +4.55%) past five years have been a roller coaster could be the understatement of 2026. Carvana, one of the nation's largest used-car retailers, was on the brink of bankruptcy in late 2022 due to a pandemic-era decline in used-car demand, high interest rates, and a large acquisition that added to its debt pile.

The company pulled together, restructured its debt, which was a huge relief to near-term debt maturities and massive interest burdens on said debt, and has since thrived. In fact, if you had invested $10,000 in Carvana three years ago, the value of that investment would be approaching $130,000 today. Here's the wild part: Rather than being on the brink of bankruptcy, Carvana might be on the brink of disrupting a whole new business segment -- and its stock could soar again.

Image source: Carvana.

Carvana built a better mousetrap Carvana surprised a whole bunch of investors when it announced it was buying a handful of brick-and-mortar automotive dealerships, seemingly at odds with the online-only business model that enabled it to thrive in recent years. Carvana dipping its toes into the brick-and-mortar world is far more complex and intriguing than simply beginning sales of new vehicles, and it could drive the business to new heights.

The more amusing part of the strategy is that it's still not going to sell you a new car at the brick-and-mortar dealership. Rather than merge into the world of dealerships, salesmen, and traditional new-vehicle sales methods, Carvana is using these dealerships as service locations and test-drive centers to connect with consumers in a new way and lead them to the online service for purchase.

If you're raising your eyebrow in skepticism, take a look at the next figures. Carvana's first new-car dealership, a Stellantis (STLA 1.93%) franchise in Casa Grande, Arizona, sold more than 700 new vehicles last month, CNBC reported. Not only did that dwarf the dealership's previous average of roughly 30 to 50 monthly sales before Carvana took over, according to The Wall Street Journal, but it also turned it into the nation's best-selling store.

This strategy not only opens the door to new revenue streams via new-car sales, but it is also much more than that. Purchasing dealerships opens the door for Carvana to bring in more vehicle inventory through trade-ins and/or buying vehicles from not only its customers but also through exclusive auctions only open to franchised dealers. This is a big deal and a cheaper way to turn inventory into bottom-line profits.

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But wait, there's more Automotive retail can generally be summarized into four distinct areas of value: new vehicle sales, used vehicle sales, parts and service (P&S), and finance and insurance (F&I). Previously, Carvana obviously was thriving on its used-car online business and also offered finance and insurance. Now it can cover all aspects of automotive retail, which includes the higher-margin parts and service segment.

Saying parts and service is a higher-margin business doesn't do it justice. Using AutoNation as a benchmark, as one of the largest publicly traded dealership groups, investors have great insight into how the numbers from revenue to gross profit flip completely in the auto retail business.

This first pie graph (revenue) probably splits the automotive retail pie roughly as investors expect, driven largely by, of course, new and used vehicle sales.

Data source: AutoNation Q1 2026 10Q. Chart: Author.

Here's where the auto retail business gets intriguing when looking at gross margins.

Data source: AutoNation Q1 2026 10Q. Chart: Author.

In other words, while AutoNation's P&S segment generated only 19% of first-quarter revenue, it generated almost half of the company's gross profit. Taking it a step further, while F&I and P&S are likely afterthoughts for many investors, the two combined accounted for 78% of AutoNation's gross profit during the first quarter.

Let's refocus OK, that's a lot to digest, and for many investors it might be eye-opening. Let's refocus more broadly on why Carvana's strategic move to buy dealerships is a huge win and summarize three key points.

First, the move to buy dealerships gives Carvana access to new-car buyers with trade-in vehicles and to exclusive dealership vehicle auctions. Both are cheaper ways to acquire inventory, which, thanks to Carvana's online reach, only improves the company's economic moat and competitive advantages. Traditional dealerships can generally only sell local inventory to local customers, whereas Carvana can sell you a vehicle from one side of the nation to the other -- and now it has even more inventory access to offer, luring in more customers.

Second, this opens two new doors for Carvana's business. Yes, it had already been thriving in used-car sales and covered F&I, but now it covers the other two aspects of auto retail via new-car sales and P&S. These are incremental and additional revenue streams that will drastically boost its overall business.

Third, diversification plays a big role in Carvana's strategic decision to buy dealerships. Carvana was on the brink of bankruptcy in part due to a struggling used-car market. Adding new-vehicle sales to the mix helps diversify its top and bottom lines, because sometimes one sector of the auto retail business is hot, and one is not. And in cases when both of those sectors are not hot, P&S still does great business because if a car needs repairs, or warranty and recall work, it doesn't matter what the new and used retail markets are doing.

Time to buy? Carvana could continue to buy brick-and-mortar dealerships while never selling a vehicle on-site ever, and it could still completely change the game, as shown by the instant success its Arizona dealership is having. That's because this strategy really isn't about traditional dealership sales. Consider that Carvana has roughly seven dealerships purchased out of about 16,990 retailers in the U.S. market. Those nearly 17,000 retailers generated $1.3 trillion in sales last year alone, leaving incredible growth ahead. Carvana's strategic pivot was wild, caught many off guard, and it's brilliant.

CVNA data by YCharts

It took three years for Carvana to turn a $10,000 investment into $130,000, and if the company continues to buy dealerships, it will likely take longer to build into a repeat scenario. But it may not be the last time Carvana turns a $10,000 investment into a 10-bagger.

Carvana (CVNA - Free Report) closed at $64.83 in the latest trading session, marking a -2.76% move from the prior day. This change lagged the S&P 500's daily loss of 1.44%. On the other hand, the Dow registered a loss of 0.09%, and the technology-centric Nasdaq decreased by 2.22%.

The company's shares have seen a decrease of 2.36% over the last month, surpassing the Retail-Wholesale sector's loss of 6.89% and falling behind the S&P 500's gain of 0.08%.

Analysts and investors alike will be keeping a close eye on the performance of Carvana in its upcoming earnings disclosure. The company is forecasted to report an EPS of $0.42, showcasing a 61.54% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $6.9 billion, up 42.6% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $1.58 per share and a revenue of $28.14 billion, demonstrating changes of -6.51% and +38.46%, respectively, from the preceding year.

Investors should also note any recent changes to analyst estimates for Carvana. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Carvana is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at valuation, Carvana is presently trading at a Forward P/E ratio of 42.2. For comparison, its industry has an average Forward P/E of 16.58, which means Carvana is trading at a premium to the group.

One should further note that CVNA currently holds a PEG ratio of 11.25. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Internet - Commerce industry stood at 0.98 at the close of the market yesterday.

The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 164, placing it within the bottom 33% of over 250 industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

Carvana is rated Buy with a 12-month price target of $80, reflecting strong operational execution and margin resilience. CVNA achieved record Q1 2026 results: 40% YoY retail unit growth, 52% revenue growth, and a 10.4% adjusted EBITDA margin, with net leverage at 1.1x. Operational improvements—AI-driven logistics, centralized reconditioning, and scale—are driving efficiency, with further margin upside as these roll out nationwide.

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."

Carvana Co (NYSE:CVNA) stock is down 7.6% to trade at $64.71 today, weighed down by CarMax's (KMX) earnings report that detailed used-car market softness and subprime auto risks. Despite a 23% year to date deficit, CVNA is flashing a historically bullish signal in its options pits.

Carvana sports a 10-day put/call volume ratio of 2.08 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that stands higher than 94% of readings from the past year.

This marks the 10th time in the last three years that the equity's 10-day buy-to-open put/call ratio crossed over 1.0 and hit the 90th percentile. Per Schaeffer's Senior Quantitative Analyst Rocky White, CVNA was higher one month later 70% of the time after these signals with an average 24.4% return. From its current perch, this would put the stock back above its year-to-date breakeven level and pad its 10.3% year-over-year deficit. 

Short squeeze potential is worth watching as well. Short interest has started to taper off in the most recent reporting period, yet the 72.22 million shares sold short account for 11.6% of the stock's total available float. At CVNA's average pace of trading, it would take shorts over five trading days to buy back their bearish bets.

Options look like an attractive route. Carvana's Schaeffer's Volatility Index (SVI) sits in the 22nd percentile of its annual rage In other words, near-term option traders are pricing in relatively low volatility expectations.

Here are five stocks added to the Zacks Rank #1 (Strong Buy) List today:

Fomento Economico Mexicano (FMX - Free Report) : This bottler of Coca-Cola trademark beverages has seen the Zacks Consensus Estimate for its current year earnings increasing 20.2% over the last 60 days.

Silvercorp Metals Inc. (SVM - Free Report) : This miner of mineral properties has seen the Zacks Consensus Estimate for its current year earnings increasing 25% over the last 60 days.

Orion Group Holdings, Inc. (ORN - Free Report) : This specialty construction company has seen the Zacks Consensus Estimate for its current year earnings increasing 8.1% over the last 60 days.

Carvana Co. (CVNA - Free Report) : This e-commerce platform for buying and selling cars has seen the Zacks Consensus Estimate for its current year earnings increasing 23.4% over the last 60 days.

Select Water Solutions, Inc. (WTTR - Free Report) : This water management solutions company has seen the Zacks Consensus Estimate for its current year earnings increasing 46.2% over the last 60 days.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The move suggests some dip-buying or short-covering is showing up following last week’s weakness, despite a cautious tape for discretionary names. Here’s what investors need to know.

Carvana stock is showing upward movement. What’s driving CVNA shares up? What CarMax’s Recent Earnings Mean for CarvanaCarMax last week posted fiscal first-quarter adjusted EPS of $1.31 versus expectations of 94 cents on revenue of $8.01 billion versus $7.41 billion, but its shares slipped as investors focused on weaker retail used-vehicle profitability.

Management also warned that margin pressure is likely to persist as it prioritizes sales growth, which is weighing on sentiment across the used-auto retail group.

Even with the earnings beat, CarMax’s gross profit fell 4.4% to $854.4 million and gross profit per retail used unit dropped $230 to $2,177, reinforcing the idea that pricing competition is still intense.

Critical Price Levels to Watch for CVNACarvana is trying to stabilize near its 20-day simple moving average ($68.29), but the bigger trend picture still leans heavy: the stock is trading 5.3% below its 50-day SMA ($72.20) and 6.9% below its 200-day SMA ($73.50). That bearish "stack" matters because it often turns rallies into sellable bounces, especially after the death cross that formed in March.

For momentum, RSI is the cleaner read right now: at 52.19 it’s basically neutral, which fits a stock that’s chopping rather than trending hard in either direction. RSI measures how stretched buying or selling pressure is, and this level says the stock isn’t oversold even though it’s still working back from a weak spring setup (with a recent swing low in March and swing high in April).

Key Resistance: $73.00 — a round-number area that lines up with the 200-day moving-average zone, where rebounds can stall Key Support: $61.00 — a nearby floor above the recent low zone where buyers previously showed up What Is Carvana and How Does It Operate?Carvana is an e-commerce platform for buying and selling used cars, with revenue coming from used vehicle sales, wholesale vehicle sales, and other sales and revenues. Those "other" streams include selling loans through securitizations or financing partners, plus commissions on vehicle service contracts and GAP waiver coverage.

The key point for today’s read-through is that retail unit economics still drive the story, and that’s exactly where CarMax is flagging ongoing pressure. If peers keep leaning into price cuts to move inventory, it can keep a lid on margin expectations across the online and brick-and-mortar used-car space.

Carvana’s Benzinga Edge Rankings ExplainedBelow is the Benzinga Edge scorecard for Carvana, highlighting its strengths and weaknesses compared to the broader market:

Momentum: Weak (Score: 22.63) — The stock’s recent trend strength is lagging, which fits with price still pinned under key longer-term moving averages. Growth: Strong (Score: 98.93) — The scorecard is flagging a growth-heavy profile, which can keep the stock sensitive to execution and margin expectations. The Verdict: Carvana’s Benzinga Edge signal reveals a growth-heavy profile with weak momentum, meaning the long-term narrative may be intact but the chart still needs to prove it can sustain breakouts. For longer-term bulls, the key is whether price can reclaim the low-$70s area; for risk control, the $61.00 support zone is the nearby "line in the sand."

CVNA Stock Price Movement on MondayCVNA Stock Price Activity: Carvana shares were up 2.28% at $68.08 at the time of publication on Monday, according to Benzinga Pro data.

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Carvana (CVNA - Free Report) closed the last trading session at $68.9, gaining 4.4% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $94.4 indicates a 37% upside potential.

The mean estimate comprises 20 short-term price targets with a standard deviation of $10.73. While the lowest estimate of $67.00 indicates a 2.8% decline from the current price level, the most optimistic analyst expects the stock to surge 74.2% to reach $120.00. It's very important to note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.

While the consensus price target is a much-coveted metric for investors, solely banking on this metric to make an investment decision may not be wise at all. That's because the ability and unbiasedness of analysts in setting price targets have long been questionable.

But, for CVNA, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.

Price, Consensus and EPS Surprise

Here's What You Should Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.

While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?

They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.

However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.

That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.

Here's Why There Could be Plenty of Upside Left in CVNAAnalysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason to expect an upside in the stock. That's because empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

The Zacks Consensus Estimate for the current year has increased 0.6% over the past month, as one estimate has gone higher compared to no negative revision.

Moreover, CVNA currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Therefore, while the consensus price target may not be a reliable indicator of how much CVNA could gain, the direction of price movement it implies does appear to be a good guide.

Carvana (CVNA - Free Report) closed the most recent trading day at $70.04, moving +1.65% from the previous trading session. This change outpaced the S&P 500's 0.57% loss on the day. On the other hand, the Dow registered a gain of 0.64%, and the technology-centric Nasdaq decreased by 1.15%.

The company's stock has climbed by 4.36% in the past month, exceeding the Retail-Wholesale sector's loss of 3.04% and the S&P 500's gain of 2.14%.

The upcoming earnings release of Carvana will be of great interest to investors. In that report, analysts expect Carvana to post earnings of $0.42 per share. This would mark year-over-year growth of 61.54%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.9 billion, up 42.6% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.58 per share and revenue of $27.58 billion. These totals would mark changes of -6.51% and +35.72%, respectively, from last year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Carvana. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been a 0.64% rise in the Zacks Consensus EPS estimate. At present, Carvana boasts a Zacks Rank of #1 (Strong Buy).

In the context of valuation, Carvana is at present trading with a Forward P/E ratio of 43.61. This represents a premium compared to its industry average Forward P/E of 16.73.

Also, we should mention that CVNA has a PEG ratio of 11.63. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Internet - Commerce industry stood at 1.01 at the close of the market yesterday.

The Internet - Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 109, this industry ranks in the top 45% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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Used-car giant Carvana is reportedly making a push into the new vehicle market.

As The Wall Street Journal (WSJ) reported Monday (May 18), the company has acquired a network of seven Stellantis dealerships, a move that the report said is disrupting traditional sales models while alarming established franchise owners.

This expansion began with a pilot earlier this year when Carvana purchased a dealership in Casa Grande, Arizona. By last month, that location had become the top-selling Chrysler, Jeep, Ram, and Dodge dealer in the U.S. 

Monthly sales surged from roughly 30 to 50 vehicles to 350 under Carvana’s management, according to Stellantis figures shared with dealers and seen by WSJ.

The report said this growth is driven by applying the company’s digital playbook — featuring no-haggle pricing and remote, couch-based transactions — to new-car sales. It’s what attracted customer Joshua Higginbotham of Kansas City.

“I’m sure I could’ve gone into a dealership, got some more gray hairs, and negotiated it down to whatever Carvana had it at or lower, but I’m not going to do that to save $1,000 or even a few thousand dollars,” he told WSJ.

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So far, Stellantis is the only carmaker to have allowed Carvana to become a franchised dealer. This move, the report added, has been tough to swallow for traditional dealers who sell Stellanis brands like Dodge and Chrysler.

“Stellantis dealers are in an uproar over this,” said South Florida Jeep-Ram dealer GianMarco Taverna. He added that he doesn’t mind Carvana’s entry into business, provided Stellantis sticks to policies keeping a single dealer from growing too large.

“It is up to us to compete and figure it out,” Taverna said.

Meanwhile, used cars remain Carvana’s bread and butter, with the company recently reporting new quarterly records after it sold 187,393 retail units and took in revenues of $6.4 billion. Those figures marked respective year-over-year increases of 40% and 52%.

The company’s move into the new car business comes as other digital players are entering the realm of physical auto sales.

For example, Hertz recently announced the launch of a dedicated Hertz showroom on eBay’s platform, bringing more than 8,000 “Hertz Certified” vehicle listings to the eCommerce seller’s automotive marketplace.

And Amazon has reportedly begun expanding its automove program as it focuses on forming more partnerships with vehicle sellers.