Spotting Winners: Carvana (NYSE:CVNA) And Online Retail Stocks In Q2

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Carvana (NYSE:CVNA) and the rest of the online retail stocks fared in Q2.

Consumers ever rising demand for convenience, selection, and speed are secular engines underpinning ecommerce adoption. For years prior to Covid, ecommerce penetration as a percentage of overall retail would grow 1-2% annually, but in 2020 adoption accelerated by 5%, reaching 25%, as increased emphasis on convenience drove consumers to structurally buy more online. The surge in buying caused many online retailers to rapidly grow their logistics infrastructures, preparing them for further growth in the years ahead as consumer shopping habits continue to shift online.

The 6 online retail stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.4% while next quarter’s revenue guidance was 0.6% below.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Carvana (NYSE:CVNA)

Known for its glass tower car vending machines, Carvana (NYSE:CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.

Carvana reported revenues of $4.84 billion, up 41.9% year on year. This print exceeded analysts’ expectations by 5.7%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and impressive growth in its units.

Carvana scored the biggest analyst estimates beat and fastest revenue growth of the whole group. The company reported 143,280 units sold, up 41.2% year on year. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 1.5% since reporting and currently trades at $328.51.

Is now the time to buy Carvana? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q2: Amazon (NASDAQ:AMZN)

Founded by Jeff Bezos after quitting his stock-picking job at D.E. Shaw, Amazon (NASDAQ:AMZN) is the world’s largest online retailer and provider of cloud computing services.

Amazon reported revenues of $167.7 billion, up 13.3% year on year, outperforming analysts’ expectations by 3.4%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ operating income estimates.

Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 8.1% since reporting. It currently trades at $215.10.

Is now the time to buy Amazon? Access our full analysis of the earnings results here, it’s free for active Edge members.

Slowest Q2: Wayfair (NYSE:W)

Founded in 2002 by Niraj Shah, Wayfair (NYSE:W) is a leading online retailer of mass-market home goods in the US, UK, Canada, and Germany.

Wayfair reported revenues of $3.27 billion, up 5% year on year, exceeding analysts’ expectations by 4.8%. Still, it was a mixed quarter as it posted a significant miss of analysts’ active customers estimates.

Wayfair delivered the slowest revenue growth in the group. The company reported 21 million active buyers, down 4.5% year on year. Interestingly, the stock is up 12.7% since the results and currently trades at $73.50.

Read our full analysis of Wayfair’s results here.

Chewy (NYSE:CHWY)

Founded by Ryan Cohen, who later became known for his involvement in GameStop, Chewy (NYSE:CHWY) is an online retailer specializing in pet food, supplies, and healthcare services.

Chewy reported revenues of $3.10 billion, up 8.6% year on year. This print surpassed analysts’ expectations by 0.8%. More broadly, it was a mixed quarter as its performance in some other areas of the business was disappointing.

Chewy had the weakest performance against analyst estimates among its peers. The stock is down 8.7% since reporting and currently trades at $38.41.

Read our full, actionable report on Chewy here, it’s free for active Edge members.

Coupang (NYSE:CPNG)

Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE:CPNG) is an e-commerce giant often referred to as the "Amazon of South Korea".

Coupang reported revenues of $8.52 billion, up 16.4% year on year. This number beat analysts’ expectations by 2.1%. It was a very strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ revenue estimates.

The company reported 24.1 million active buyers, up 9.4% year on year. The stock is up 5.3% since reporting and currently trades at $31.53.

Read our full, actionable report on Coupang here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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