Carvana stock price target lowered to $360 from $380 at DA Davidson

Investing.com - DA Davidson maintained its Neutral rating on Carvana (NYSE:CVNA) while lowering its price target to $360 from $380 on Thursday. The stock currently trades at a P/E ratio of 79.57, which InvestingPro data shows is relatively high compared to its growth rate.

The online used car retailer beat consensus estimates on most metrics, including used retail units, which showed accelerating growth compared to competitors that experienced decelerations. This performance aligns with Carvana’s impressive 39.48% revenue growth over the last twelve months.

Carvana ’s EBITDA also exceeded expectations, reaching $1.79 billion in the last twelve months, although margins declined from the previous quarter despite remaining significantly higher than industry competitors.

Gross profit per unit (GPU) continued to lead the industry "by a VERY WIDE margin" and surpassed estimates, though it showed a slight year-over-year decrease. The company maintains a healthy gross profit margin of 21.89%.

The company raised guidance to the high end or above its previous range, demonstrating confidence in its near-term performance despite the analyst’s reduced price target. According to InvestingPro, net income is expected to grow this year, with analysts generally maintaining a positive outlook. Discover 14+ additional ProTips and comprehensive valuation metrics in Carvana’s Pro Research Report, available exclusively to subscribers.

In other recent news, Carvana reported mixed third-quarter results, which have prompted various reactions from financial analysts. The company exceeded consensus expectations with a 10% revenue increase and a 6% rise in EBITDA, as noted by Citizens. However, Carvana’s fourth-quarter unit guidance suggests a potential decline, with the high end of EBITDA guidance slightly below consensus. Despite these mixed results, several firms have maintained positive ratings on Carvana. Needham reiterated its Buy rating with a $500 price target, viewing Carvana as a top growth opportunity. Citizens also maintained a Market Outperform rating with a $460 price target. Meanwhile, BofA Securities adjusted its price target to $385 from $405, while still keeping a Buy rating. BTIG also kept its Buy rating with a $450 price target, despite Carvana’s retail gross profit per unit falling short of expectations. RBC Capital reiterated its Outperform rating, highlighting volume upside and conservative retail unit guidance.

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