Carvana is priced like a tech giant. But the numbers don’t hold. The company’s market cap hit $74.1 billion on July 21. Revenue for the trailing twelve months sits at $14.84 billion. That’s a price-to-sales ratio of 5.0. The price-to-earnings ratio is 120.0. No other used car retailer trades anywhere near that level.
The stock closed at $341.72. That’s up 70.8% year to date. The 52-week low was $118.50. The high is $364.00. Volume came in at 1.56 million shares. Average volume is 3.41 million. The rally has been relentless. But the fundamentals haven’t caught up.
Net income for the last twelve months was $398 million. That’s a net margin of 3.23%. Free cash flow is positive. But debt remains elevated. Carvana’s total liabilities exceed $9.2 billion. Interest coverage is thin. The company suspended guidance in April. No forecast. No cushion.
Retail gross profit per unit dropped from $3,497 in Q3 2024 to $3,226 in Q4. That’s a 7.7% decline. The ratio of direct consumer buys to auction sourcing fell from 80% to 70%. That shift signals pressure on core retail operations. Subprime auto delinquencies are rising. That hits receivables. That hits funding.
Analyst consensus is mixed. Thirty-one firms cover the stock. Forty-five percent rate it Hold. Twenty-nine percent say Buy. Three percent call it Strong Sell. The average price target is $219.84. That’s 35.6% below current levels. StockScan pegs fair value at $149.70. That’s a 56.9% downside.
Forecasts for 2026 show a wide range. Low estimate is $203.73. High is $401.46. The average sits at $302.59. That’s 12.9% below today’s price. Long-term projections for 2030 show an average of $113.97. That’s a 67.2% drop from current levels.
Technical indicators are flashing mixed signals. RSI sits at 58.8. MACD is negative. Stochastic RSI shows oversold. ADX reads 30.6. That’s a strong trend. But direction is unclear. Moving averages are stacked bullish. MA50 is $321.18. MA200 is $246.69. Price sits above both.
Carvana’s platform is still growing. The Car Inspect app is live. Inventory turnover is improving. But the valuation assumes perfection. No margin compression. No credit risk. No slowdown in unit growth. That’s not realistic.
The company is now larger than AutoNation, CarMax, and Lithia Motors combined. But it’s still a used car dealer with thin margins and heavy debt. The stock may keep running. But the disconnect is real.
Disclaimer: This post is for information only. Not financial advice. Always do your own research before investing.
Sources
https://stockscan.io/stocks/CVNA/forecast
https://public.com/stocks/cvna/forecast-price-target
https://longforecast.com/cvna-stock