How ADESA Is Supercharging Carvana's Next Phase of Growth

Used car e-retailer Carvana’s CVNA $2.2 billion ADESA acquisition is proving to be more than just a bold expansion. It’s becoming a key pillar of the company’s operational improvement and long-term growth strategy.

Since the buyout, Carvana has been steadily integrating ADESA’s physical locations into its ecosystem. By Q2’25 end, the company had integrated 12 ADESA sites, enabling more reconditioning and inventory pooling. This broader footprint has increased Carvana’s inventory pools to 30—a 50% jump from a year ago—helping the company prepare more vehicles faster to meet rising demand.

These integrations aren’t just about scale but are also driving real efficiencies. With more locations to store and process cars, Carvana has cut inbound transport distances by 20% and outbound miles by 10% year over year. That’s helping speed up deliveries, which are now 0.7 days faster than last year. For customers, it means quicker turnarounds and for Carvana, it means lower costs and smoother logistics.

Carvana is also ramping up ADESA Clear, a digital auction platform now live at 47 Carvana and ADESA sites. It combines ADESA’s deep wholesale knowledge with Carvana’s tech know-how to create a seamless experience for both buyers and sellers. For commercial sellers, it offers a full-service, cost-efficient remarketing solution. For wholesale buyers, it unlocks more vehicle options and a streamlined digital bidding process.

All this supports Carvana’s ambitious goal of selling 3 million cars a year with a 13.5% adjusted EBITDA margin within the next 5-10 years. While its target is still a long way off, the ADESA integration is laying the groundwork—boosting capacity, improving efficiency, and enhancing the customer experience. All in all, ADESA is becoming a powerful engine behind Carvana’s next phase of growth.

The Zacks Rundown on Carvana

Shares of CVNA have jumped 44% over the past six months, outperforming the industry as well as its close peers like CarMax KMX and AutoNation AN. CarMax — being the largest retailer of used vehicles in the United States — witnessed its stock price decline more than 33% over the past year. AutoNation — one of the leading auto retailers of the country (selling both new and used vehicles) — saw its share price drop 2% in the same timeframe.

From a valuation perspective, Carvana appears overvalued. It has a Value Score of D. Going by its price/sales ratio, the company is trading at a forward sales multiple of 3.74, higher than its industry’s 0.28. In contrast, CarMax and AutoNation trade at just 0.3X and 0.26X, respectively.

See how the Zacks Consensus Estimate for CVNA’s earnings has been revised over the past 60 days.

Carvana stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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This article originally published on Zacks Investment Research (zacks.com).

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