Can Carvana's Same-Day Delivery Fuel Profits and Market Share?

Carvana CVNA is redefining how cars are bought and sold with its same-day delivery service. This was first introduced in Arizona and has now expanded to more than 15 states, including major markets like Chicago and Denver. Customers in these regions can now purchase a vehicle online and have it delivered—or sell their own car—in less than 24 hours.

This speed is a clear differentiator in the $1.9 trillion U.S. used-car market, where traditional dealers could take several days to complete a sale. By making car buying and selling as fast and seamless as ordering online, Carvana is aligning auto retail with broader e-commerce trends.

Faster delivery shortens the sales cycle, allowing Carvana to turn inventory more quickly and boost volumes. It also builds customer satisfaction, driving repeat sales and brand loyalty while lowering acquisition costs through word-of-mouth referrals.

The key lies in Carvana’s integrated logistics and reconditioning network, which makes this offering scalable. By controlling more of its infrastructure, the company reduces delivery costs and avoids bottlenecks. This not only supports profitable growth but also strengthens its competitive moat as rivals struggle to match the convenience.

Expanding into dense metropolitan areas like Chicago vastly increases Carvana’s addressable market. These rollouts help capture share from brick-and-mortar dealers and push the company deeper into regions with high transaction potential.

Importantly, the strategy is showing results. In Q2, Carvana reported a 41% increase in retail unit sales and record adjusted EBITDA margins of 12.4%. Scaling same-day delivery can amplify this momentum by improving efficiency, expanding reach and enhancing customer loyalty. For investors, it highlights Carvana’s ability to turn innovation into results, positioning CVNA for further share gains in a massive market.

The Zacks Rundown on CVNA

Shares of CVNA have risen 12% over the past three months, outperforming the industry as well as its close peers like CarMax KMX and Lithia Motors AN. CarMax — being the largest retailer of used vehicles in the United States — witnessed its stock price decline more than 8% over the past year. Lithia Motors — one of the leading auto retailers of the country (selling both new and used vehicles) — saw its share price contract 0.2% 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 3.3, higher than its industry. Meanwhile, CarMax and Lithia Motors trade at just 0.31X and 0.2X, respectively.

See how the Zacks Consensus Estimate for CVNA’s 2025 earnings has been revised over the past 30 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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