Why Is Carvana (CVNA) Down 3.3% Since Last Earnings Report?

A month has gone by since the last earnings report for Carvana (CVNA). Shares have lost about 3.3% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Carvana due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Carvana Co. before we dive into how investors and analysts have reacted as of late.

Carvana’s Q2 Earnings Top Estimates

Carvana reported second-quarter earnings of $1.28 per share, which breezed past the Zacks Consensus Estimate of $1.10 per share and the year-ago quarter’s earnings of 14 cents per share. Better-than-expected revenues across all segments led to the outperformance. Revenues of $4.84 billion beat the Zacks Consensus Estimate by 5.62% and rose 42% year over year.

Key Highlights

Total gross profit amounted to $1.06 billion, up 49% year over year. Total gross profit per unit (GPU) was $7,426, rising from $7,049 in the year-ago period. SG&A expenses were $551 million, up 21.1% year over year. Carvana achieved an adjusted EBITDA of $601 million for the second quarter of 2025. Adjusted EBITDA margin in the quarter under review was 12.4%, up from 10.4% in the second quarter of 2024.

Segmental Performance

Retail vehicle sales totaled $3.41 billion in the quarter, rising 41.2% year over year and beating our estimate of $3.25 billion on the back of higher-than-expected sales volume. In the reported quarter, the number of vehicles sold to retail customers rose 41.2% to 143,280 from the prior-year period and exceeded our estimate of 135,750 units. Gross profit amounted to $521 million, up 50.1% year over year. Gross profit per unit came in at $3,636, which rose from $3,421 generated in the year-ago period but missed our expectation of $3,664.

In the second quarter, wholesale vehicle sales totaled $1.02 billion, up 42.2% year over year. Sales topped our estimate of $766.9 million amid higher-than-expected unit sales. During the reported quarter, the number of vehicles sold to wholesale customers soared 44.5% to 72,770 from the prior-year period and exceeded our estimate of 66,091 units. Gross profit came in at $132 million, up 48.3% from the corresponding quarter of 2024. GPU came in at $921, up 4.9% year over year.

In the period under consideration, other sales and revenues rose 47.3% year over year to $411 million and beat our forecast of $344.3 million. Gross profit was $411 million, up 47.3% year over year. GPU came in at $2,869, up 4.3% year over year. It fell short of our estimate of $3,212.

Financial Position

Carvana had cash and cash equivalents of $1.86 billion as of June 30, 2025, compared with $1.72 billion as of Dec. 31, 2024. Long-term debt was $5.32 billion as of June 30, 2025, compared with $5.26 billion recorded on Dec. 31, 2024.

Outlook

For the third quarter of 2025, Carvana expects a sequential rise in retail unit sales. It expects full-year 2025 adjusted EBITDA in the range of $2-$2.2 billion, up from $1.38 billion in 2024.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 5.65% due to these changes.

VGM Scores

At this time, Carvana has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Carvana has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Carvana belongs to the Zacks Internet - Commerce industry. Another stock from the same industry, Booking Holdings (BKNG), has gained 2.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.

Booking Holdings reported revenues of $6.8 billion in the last reported quarter, representing a year-over-year change of +16%. EPS of $55.40 for the same period compares with $41.90 a year ago.

For the current quarter, Booking Holdings is expected to post earnings of $95.56 per share, indicating a change of +13.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.

Booking Holdings has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research