Carvana refreshes at-the-market offering program

Carvana Co. (NYSE:CVNA), a leading e-commerce platform for buying and selling used cars with a market capitalization of nearly $60 billion, updated its at-the-market (ATM) equity offering program, the company disclosed in a regulatory filing on Tuesday. According to InvestingPro data, the company maintains a perfect Piotroski Score of 9, indicating strong financial health. The move allows Carvana to sell shares over time at prevailing market prices through its sales agents, Barclays (LON:BARC) Capital Inc., Citigroup (NYSE:C) Global Markets Inc., and Virtu Americas LLC.

This development follows the company’s previous announcement in its Annual Report for the fiscal year ended December 31, 2024. The refreshed ATM program is anchored by a shelf registration statement and includes a prospectus dated Tuesday, February 19, 2025, as well as a prospectus supplement filed the same day.

Carvana’s Class A Common Stock will be offered through the ATM program, which is designed to provide the company with flexible financing options. The legal firm Kirkland & Ellis LLP has provided an opinion on the validity of the issuance and sale of the ATM shares, which is included as an exhibit in the SEC filing.

The filing does not specify the number of shares to be offered or the timing of any sales, leaving the company with the discretion to sell shares according to its capital needs and market conditions. The ATM program is a common strategy used by public companies to strengthen their capital structure with less market impact than a traditional stock offering. InvestingPro analysis shows Carvana operates with a moderate debt level, with a total debt-to-capital ratio of 0.09 and a healthy current ratio of 3.25, suggesting strong liquidity position.

Investors often monitor such updates closely as they can dilute existing shareholders but also provide companies with necessary funds to invest in growth or pay down debt. Carvana has not disclosed specific plans for the use of proceeds from the ATM shares. The stock is currently trading near its 52-week high of $291.27, with InvestingPro analysis suggesting the shares are slightly overvalued. InvestingPro subscribers have access to 18 additional key insights about Carvana’s valuation and financial health through the platform’s comprehensive Pro Research Report.

The information regarding Carvana’s updated ATM program is based on a press release statement filed with the SEC.

In other recent news, Carvana Co. has been the subject of various analyst reports highlighting its financial prospects and market performance. DA Davidson maintained a Neutral rating with a $220 price target, noting positive trends in used retail unit data but cautioning that high valuation requires consistent financial performance. BTIG analyst Marvin Fong reiterated a Buy rating and a $295 target, citing positive insights from franchise dealer earnings that suggest potential trends for Carvana’s upcoming report. JMP Securities maintained a Market Outperform rating with a $320 target, emphasizing a long-term scenario where Carvana could significantly boost its stock value by handling over 3 million retail units annually and achieving higher EBITDA margins.

JPMorgan raised its price target to $350 from $300, maintaining an Overweight rating, with analyst Rajat Gupta expressing confidence in Carvana’s continued positive performance into 2025. Gupta noted the importance of understanding the company’s lending arm and its impact on growth and profitability. BofA Securities also maintained a Buy rating with a $252 target, highlighting strong growth in retail used car sales and a resilient demand that offsets potential challenges from higher interest rates. These recent developments reflect a range of analyst perspectives on Carvana’s growth potential and market dynamics.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.