Carvana Raises Q3 Profit Expectations
Analysts reaffirm the company's market rating because of the improved forecast.

Carvana revised its forecast for total gross profit per unit to $5,500, an increase of $500 from before.
IMAGE: Timasu, Pixabay
Executives from the Tempe-Arizona based Carvana raised their profit outlook for the third quarter, expecting momentum from an early-year turnaround to carry through the rest of the year.
According to a statement issued on Wednesday, Carvana expects adjusted earnings before interest, taxes, depreciation and amortization to exceed $75 million in the third quarter. Earlier, the company’s adjusted EBITDA outlook was "positive" and the consensus analyst estimate was $45.7 million.
According to a Barron’s report, the revision stems from Carvana:
Selling more loans in the third quarter
Operational improvements that include lowering costs at inspection centers and in-sourcing services
Record profit per unit in the first and second quarters
Carvana reported “significant fundamental gains” in vehicle profitability in retail and wholesale operations in the second quarter, Barron's reported, noting that the company has revised its forecast for total gross profit per unit in the quarter to over $5,500, an increase of $500 from before.
With a better forecast, Carvana is on track to recover from pandemic-related difficulties, and investors are taking notice. After reporting positive second-quarter results and announcing debt restructuring plans, company stock shares rose by as much as 12% during premarket trading on Wednesday, the Detroit News reported. By 9 a.m. today, they had increased by 7.2% to $47.20. in New York, the news outlet noted.
But Carvana’s early pandemic peak is still out of reach, with current stock value down by over 85%, the article noted.
Carvana's net income also has not been positive all year, partly because of the high interest expenses associated with debt, reported the Detroit News. However, a restructuring agreement announced in July should lower borrowings by $1.2 billion and enable Carvana to delay some interest payments for the next two years, the paper reported.
Carvana’s positive outlook prompted Colin Sebastian of Baird to raise his target for Carvana‘s stock to $45 from $25 while maintaining a Hold equivalent rating. According to FactSet data, 15 analysts have assigned Carvana stock a similar rating.
Based on the assumption that some fundamental changes will be sustainable, Sebastian revised his full-year 2024 estimate from a $1.60 loss per share to a $1.23 loss, reported the Detroit News. In contrast, FactSet's analysts predict a loss of $2.56 per share for 2024.
Originally posted on Auto Dealer Today
More Industry

Gem State Stores Change Hands
A larger auto group founded in the industry’s early years sold two franchises to a neighbor group that's on a growth spurt.
Read More →
Charging In Motion
Honda has been researching wireless in-motion charging for electric vehicles since 2025, and new technology developments have put it a step closer to a final product.
Read More →
Twin Cities Stores Sell
Minnesota-based Walser Automotive Group made what it called the most significant acquisition in its history with a three-rooftop deal in Minneapolis.
Read More →
U.S. Auto Sales Still Below Prepandemic Levels
Mobility Global industry observers don’t expect the market to return to the higher volumes that became routine before Covid but to stay well below its potential.
Read More →
The Powertrain Shift
Electric-vehicle owners are backpedaling, according to new data, with product availability driving many to shift back to gas-powered engines.
Read More →
Achromatic Autos
The shades that dominate the U.S. car market don’t call attention to themselves, though grayscale may have plateaued after a 30-year upswing, research shows.
Read More →
Used-Vehicle Affordability Worsens
Listing prices in August defied seasonal trends, rising above $27,000 for the second time this year.
Read More →
First-Half Dealership Deals Up
Buy-sell activity shows that acquirers are looking for value and scale as many retailers seek to leave an increasingly competitive and complex market, Kerrigan Advisors reports.
Read More →
Kia Closes Out Summer With a Bang
Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.
Read More →
Indiana Dealership Changes Hands
A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.
Read More →