Carvana (CVNA) stock soared 16% on Thursday, putting shares on pace to close at their first record since 2021 after the online used car seller posted a blowout quarter with record sales and profit per unit sold.
The company said it sold more than 143,280 vehicles in its second quarter, up 41% from the same period a year earlier. Revenue climbed by more than 40% to $4.84 billion, the highest level in the company’s history.
Industrywide, there have been some indications that consumers are trying to jump ahead of price increases as tariffs would make new and imported vehicles more expensive.
Carvana said its gross profit per unit rose to $7,426 last quarter, with a spike in April following President Trump’s auto tariff announcements.
“That higher April retail GPU [can] be really linked to the announcements of auto tariffs in late March that drove stronger demand and higher margins,” Carvana CFO Mark Jenkins said during the company’s earnings call on Wednesday.
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Carvana said it’s on track to reach its long-term goal of selling 3 million cars annually within five to 10 years.
During the company’s earnings call, management noted Carvana has room to grow, as it currently holds just 1.5% of the US used car market. Its retail sales have grown roughly 80% over the past two years.
“Our machine is getting simpler. We’re adding additional locations to hold inventory and to recondition inventory. We’re making it so there’s less work per transaction. And I think all of that aids growth,” CEO Ernie Garcia said.
On Thursday, BofA analysts reiterated their Buy rating on the stock with a price target of $425, noting the convenience of purchasing online will only grow as consumers shift more toward used cars.
“We think CVNA is also benefitting from a mix-shift towards Used, as cost conscious customers seek value,” wrote BofA research analyst Michael McGovern.
The Tempe, Ariz.-based company has become a poster child for one of the most dramatic turnaround stories in recent years, burning short sellers who bet against its stock along the way.
Shares of Carvana are up roughly 8,000% from their all-time lows below $4 in December 2022, when the retailer was facing bankruptcy speculation.
Last year, the company posted its first-ever annual profit, with CEO and chairman Ernie Garcia telling analysts, “It’s very hard for a group to go through a period like the last two years and not disintegrate under the pressure. We didn’t disintegrate.”
Wall Street analysts have turned increasingly bullish on Carvana over the past year. The stock has 13 Buy ratings, 8 Hold, and 2 Sell.
Ines is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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