BTIG lifts Carvana stock price target to $330 from $295

On Thursday, BTIG analyst Marvin Fong increased the price target for Carvana Co. (NYSE:CVNA) shares to $330, up from the previous target of $295, while maintaining a Buy rating on the stock. According to InvestingPro data, analyst targets for CVNA range from $108 to $340, with the stock showing remarkable momentum, delivering a 126.51% return over the past year. The company’s current market capitalization stands at $55.95 billion, reflecting strong investor confidence. Fong highlighted Carvana’s impressive performance, beating consensus across key volume and margin metrics. The company sold 133.9K retail units, surpassing the expected 126.7K, marking a year-over-year increase of 42.0K cars and a quarter-over-quarter rise of 19.5K cars.

Carvana’s growth notably outpaced the combined sales growth of seven of the nation’s largest car dealers, including CarMax (NYSE:KMX). The company’s retail gross profit per unit (GPU) reached $3,308, exceeding the Street’s prediction of $3,260, while the ’Other GPU’ was $2,868, against an anticipated $2,836. This was partly due to a higher-than-expected gain on sale percentage of 10.1%, driven by improved spreads and vehicle service contract (VSC) attach rates.

Operational expenses were also effectively managed, with a 4.7% decrease in operations expense per retail unit to $1,658 quarter-over-quarter. Sales conversion improved significantly, with 0.26% of website visitors purchasing a car, compared to 0.19% in the first quarter of 2024.

Carvana’s revenue and Adjusted EBITDA for the quarter were reported at $4.2 billion and $488 million, respectively, comfortably beating the consensus of $4.0 billion and $434 million. InvestingPro analysis reveals the company’s impressive financial health score of GREAT, supported by strong revenue growth of 26.94% and a healthy current ratio of 3.64. For deeper insights into Carvana’s financial metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro. The company’s management provided guidance for sequential increases in both units sold and Adjusted EBITDA and introduced a new long-term target of 3 million units sold within a 5-10 year range at an Adjusted EBITDA margin of 13.5%. They also mentioned that while margins could potentially exceed 13.5%, the focus would be on growth rather than margin expansion in the coming years.

With the first quarter of 2025’s EBITDA margin already at 11.5%, up 390 basis points year-over-year, the target margin seems attainable. Based on these strong results, BTIG has raised its FY25E estimates for units to 579.9K and Adjusted EBITDA to $2.1 billion from the former projections of 513.2K units and $1.8 billion in EBITDA. Trading at a P/E ratio of 150.49, Carvana commands a premium valuation that reflects its strong growth trajectory. InvestingPro subscribers can access 15+ additional exclusive ProTips and detailed valuation metrics to make more informed investment decisions.

In other recent news, Carvana Co. reported impressive financial results for the first quarter of 2025, surpassing both earnings and revenue forecasts. The company’s revenue reached $4.232 billion, significantly exceeding the expected $3.91 billion. Retail units sold increased by 46% year-over-year, and the company achieved its fifth consecutive quarter of positive net income. Adjusted EBITDA more than doubled from the previous year, reaching $488 million, and the adjusted EBITDA margin stood at 11.5%.

In addition to the strong earnings report, Evercore ISI analyst Michael Montani raised Carvana’s stock price target to $280 from $245, maintaining an In Line rating. Montani cited Carvana’s significant market share gain and profit ramp as reasons for the increased target. The analyst also noted improvements in Carvana’s efficiency, with selling, general, and administrative expenses per unit approximately $1,000 lower year-over-year. Despite these positive developments, Montani cautioned about potential risks such as tariffs, subprime credit quality, and competition from new entrants like Amazon (NASDAQ:AMZN).

These recent developments underscore Carvana’s continued growth and operational efficiency in the automotive retail sector.

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