Carvana's Q2 Earnings Call: Our Top 5 Analyst Questions

Carvana’s second quarter results were met with a notably positive market reaction, as the company’s revenue and non-GAAP earnings surpassed Wall Street expectations. Management attributed this performance to continued operational improvements, a sharp increase in retail units sold, and expanded inventory selection. CEO Ernest Garcia highlighted that Carvana’s growth rate outpaced the broader automotive retail market by a substantial margin, emphasizing the company’s progress in reducing reconditioning and inbound transport costs, which contributed to stronger margins. CFO Mark Jenkins also cited higher vehicle service contract attachment rates as a key contributor to profitability.

Is now the time to buy CVNA? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Carvana’s Q2 Earnings Call

• Daniela Haigian (Morgan Stanley) asked about the sustainability of incremental adjusted EBITDA margins; CEO Ernest Garcia stated margins reflect the leverage in Carvana’s model and reiterated the long-term target of 13.5% adjusted EBITDA margin.
• Jeffrey Lick (Stephens) questioned the impact of APR pricing on loan performance; CFO Mark Jenkins explained advantages of Carvana’s vertically integrated finance platform, including direct customer interaction and enhanced data-driven underwriting.
• Brian Nagel (Oppenheimer) inquired about the effect of new reconditioning capacity on sales growth; Garcia responded that inventory and sales growth are on plan, with 12 ADESA sites now integrated and further site expansion planned.
• Sharon Zackfia (William Blair) asked for details on brand awareness and marketing strategy; Garcia indicated progress in awareness and understanding but said there remains significant opportunity for improvement, with ongoing investment in both direct and brand marketing.
• Brad Erickson (RBC) sought clarity on capital requirements for capacity expansion; Jenkins detailed that integrating ADESA sites is capital-efficient and that larger build-outs would be phased in over several years based on demand.

Catalysts in Upcoming Quarters

In the upcoming quarters, the StockStory team will be monitoring (1) the pace and effectiveness of ADESA facility integrations and their impact on inventory selection and reconditioning efficiency, (2) the results of stepped-up marketing campaigns on brand awareness and customer acquisition, and (3) ongoing improvements in operational leverage, particularly SG&A expense per unit. Additional focus will remain on the adoption of ancillary products and developments in Carvana’s finance platform.

Carvana currently trades at $345.98, up from $333.52 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

The Best Stocks for High-Quality Investors

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.