Carvana Q4 Earnings: A Make-or-Break Moment for Investors
Carvana, the online used-car retailer, is scheduled to release its fourth-quarter and full-year 2025 financial results on February 18. This earnings announcement has the potential to redefine the narrative for the company, which has undergone a dramatic turnaround since its initial public offering (IPO) in 2017.
After a rollercoaster ride marked by volatile trading in 2025, Carvana’s stock has emerged as one of the most closely watched stocks in the market. The company’s inclusion in the S&P 500 Index in December 2025 has mechanically increased demand for the stock, and its growth in retail unit sales and revenue has signaled a dramatic turnaround from previous years of volatility and losses.
Carvana’s Growth Story
Carvana has delivered a dramatic resurgence in its share price in 2025, with investor confidence returning and fundamentals improving. The company’s growth in retail unit sales and revenue has been impressive, with record retail units sold of 155,941 in the third quarter of 2025, representing a 44% year-over-year increase. Total revenue surged 55% year-over-year to $5.7 billion, marking the highest quarterly sales figure in the company’s history.
Profitability has also strengthened meaningfully, with net income rising to $263 million, up 78% year-over-year, and net income margin expanding to 4.7%. Adjusted EBITDA reached $637 million, a company record and a 48% year-over-year increase. Earnings per share (EPS) came in at $1.03, a significant increase from $0.64 in Q3 2024, but still below estimates.
Q4 Earnings Expectations
For the fourth quarter, analysts tracking Carvana project EPS to grow 96.4% from the prior-year quarter to $1.10. Moreover, the company’s EPS is expected to climb 389.2% year-over-year to $4.99 in fiscal 2025 and grow another 45.7% to $7.27 in fiscal 2026.
Carvana has also provided guidance for the fourth quarter, expecting retail units sold to exceed 150,000, and reiterated that full-year adjusted EBITDA should reach or exceed the high end of its previously communicated range between $2.0 billion and $2.2 billion.
Analyst Ratings and Price Targets
CVNA has a consensus rating of a “Strong Buy” overall. Of the 23 analysts covering the stock, 15 advise a “Strong Buy,” three suggest a “Moderate Buy,” and five analysts give it a “Hold” rating. The average price target of $491.86 suggests an upside of 42.9%, while the Street-high target of $600 signals that the stock could rise as much as 74.3% from current levels.
Last month, JPMorgan analyst Rajat Gupta maintained an “Overweight” rating on Carvana and raised the price target to $510 from $490, reflecting continued confidence in the company’s market position and growth potential despite recent volatility in the stock.
Key Takeaways for Indian Investors
For Indian investors looking to invest in Carvana, it’s essential to consider the company’s growth story, Q4 earnings expectations, and analyst ratings. While the stock has come under pressure in recent weeks, the overall trend remains positive, and the company’s inclusion in the S&P 500 Index has increased its visibility and demand.
However, it’s crucial to keep in mind that the stock is trading at 50x forward earnings, well above the sector average. This valuation multiple may be a concern for some investors, and it’s essential to carefully evaluate the company’s growth prospects and profitability before making an investment decision.
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Conclusion
In conclusion, Carvana’s Q4 earnings announcement on February 18 will be a crucial event for investors. While the company’s growth story and Q4 earnings expectations are positive, the stock’s valuation multiple and recent volatility are concerns that need to be addressed. Indian investors should carefully evaluate the company’s prospects and profitability before making an investment decision, and stay updated on the latest developments in the Indian stock market.
