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Investing.com - Needham has raised its price target on Carvana (NYSE:CVNA) to $500.00 from $340.00 while maintaining a Buy rating on the stock following the company’s second-quarter results. According to InvestingPro data, the stock has delivered an impressive 150% return over the past year, though it currently trades at a relatively high P/E ratio of 107.
The research firm views Carvana as the "best large cap, profitable growth story" in its coverage universe, citing the company’s "unique and best in class model" within a fragmented industry where Carvana still has significant room to expand its market share. The company’s strong growth trajectory is evidenced by its 32.2% revenue growth and perfect Piotroski Score of 9.
Needham’s analysis points to Carvana’s untapped vehicle reconditioning capacity and potential for continued operational efficiencies that should drive improvements in adjusted EBITDA per retail unit.
The new $500 price target is based on multiple valuation approaches, including 35 times Needham’s 2027 estimated adjusted EBITDA, which aligns with the near-term growth rate in adjusted EBITDA projected in their model.
Alternative valuation methods supporting the target include 25 times the firm’s 2030 estimated adjusted EBITDA discounted back, or Carvana achieving its target of 3 million retail units at guided margins by 2033.
In other recent news, Carvana reported its second-quarter 2025 earnings, surpassing Wall Street expectations with a notable revenue of $4.84 billion, marking a 42% increase year-over-year. The company’s earnings per share also exceeded forecasts, reflecting strong operational efficiency and market expansion efforts. Following these results, JMP Securities raised its price target for Carvana to $460 from $440, maintaining a Market Outperform rating, as the company reported revenue and EBITDA that exceeded consensus expectations by 6% and 9%, respectively. Additionally, BTIG increased its price target for Carvana to $450 from $395, citing the company’s strong margins and performance in retail gross profit per unit and per unit operations expense. Both firms maintained positive ratings on Carvana, highlighting its robust quarterly results. These developments signal continued confidence from analysts in Carvana’s operational strategies and financial health.
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