Needham reiterates Buy rating on Carvana stock with $500 price target

Investing.com - Needham maintained its Buy rating on Carvana (NYSE:CVNA) stock with a $500 price target following the company’s third-quarter results. This aligns with the stock’s highest analyst target, while InvestingPro data shows the company is currently trading slightly above its Fair Value, with 5 analysts recently revising earnings estimates upward.

The research firm views Carvana as the top large-cap growth opportunity in its coverage universe, citing a clear and extended growth trajectory against what it considers conservative near-term unit guidance compared to recent performance. This optimism is supported by Carvana’s impressive 39.48% revenue growth over the last twelve months and a 74.05% price return year-to-date.

Needham highlighted Carvana’s consistent execution and long-term guidance as demonstrations of the company’s business model strength and growing competitive advantage over peers that have reported more volatile results. InvestingPro data confirms this strength with an overall Financial Health score rated as "GREAT" and a 50% return on equity, suggesting effective capital utilization despite moderate debt levels.

The firm believes Carvana deserves multiple expansion as a "long-term compounder," comparing it to established market leaders in large total addressable markets such as streaming or food delivery services.

Needham’s $500 price target represents 35 times its 2027 estimated adjusted EBITDA, or 25 times its 2030 estimated adjusted EBITDA when discounted back, based on Carvana achieving its goal of 3 million retail units at 13% margins by 2033.

In other recent news, Carvana reported mixed third-quarter 2025 results, with revenue and EBITDA surpassing consensus expectations by 10% and 6%, respectively. Despite this, guidance for the fourth quarter indicates a potential decline in units sold, and the high end of EBITDA guidance fell slightly below consensus. Analysts have responded to the results with varying price targets. Citizens maintained a Market Outperform rating with a $460 price target, while RBC Capital reiterated an Outperform rating, also with a $460 price target, citing positive factors like conservative retail unit guidance and the absence of sub-prime concerns. BTIG maintained its Buy rating and a $450 price target despite Carvana’s retail gross profit per unit falling short of expectations. In contrast, BofA Securities lowered its price target to $385 from $405, maintaining a Buy rating after Carvana exceeded Street expectations with 156,000 units sold and $637 million in EBITDA. These developments reflect a range of analyst perspectives on Carvana’s recent performance and future outlook.

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