Latest news with #ADESA
Globe and Mail
13 hours ago
- Automotive
- Globe and Mail
Back From the Brink: Carvana Is a High-Flying Growth Stock. But Is It a Buy Now?
Carvana (NYSE: CVNA) has been riding high after a blockbuster first quarter that saw the online used-car retailer hit record highs across virtually every key metric. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Investors who bought in when Carvana was a single-digit stock during a very rocky 2022 are sitting on spectacular gains now, with the share price up 1,000% over the past three years. The stock has surged 183% over the past year, and lately it's been within striking distance of its all-time highs. After such a massive run, is it too late to park this e-commerce upstart in your portfolio? Let's kick the tires on Carvana. An impressive turnaround From the start, retail units (vehicles) sold has been Carvana's most important metric. In 2017 -- its first year as a public company -- Carvana sold 44,252 retail units, more than double its total from the previous year. That number peaked in 2021 at 425,237 units sold, right before things took a scary turn. After eight years of hypergrowth and steady margin improvement, Carvana ran into a perfect storm in 2022. Multiple interest rate hikes, stubborn inflation, and record-high vehicle prices slammed the brakes on used-car sales. Meanwhile, Carvana had overextended itself at the worst possible time, finalizing its $2.2 billion acquisition of ADESA's U.S. brick-and-mortar auction business in May 2022 -- just as the market was stalling. For full-year 2022, Carvana posted a net loss of $2.9 billion, while gross profit per unit -- its second most important metric -- dropped from $4,537 to $3,022. The stock plunged 98% in 2022. Heading into 2023, Carvana was holding excess inventory and $6.6 billion in long-term debt. The stock had plummeted below $10 a share, and bankruptcy rumors were swirling. In a letter to shareholders, Carvana CEO Ernie Garcia said 2023 would be "a key year in our story." He was right. The company restructured its debt, rightsized its operations, and cut $1.1 billion in annualized selling, general, and administrative expenses. Now, in mid-2025, the company is at the intersection of growth and profitability. Hitting on all cylinders As I noted earlier, Carvana's first quarter of 2025 was a beauty. The company generated $4.2 billion in first-quarter revenue, a 38% increase from the year-ago period, on sales of 133,898 retail units, a 46% increase. Both were quarterly records. On the bottom line, the company more than doubled net income and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to $373 million and $488 million, respectively. Compared to its previous quarterly high for retail units sold (Q2 2022) Carvana sold 14% more vehicles with 30% less inventory, 45% less advertising spend, and 16% fewer employees. Doing more with less is a good thing. The top- and bottom-line results prompted Garcia to unveil Carvana's next big goal: selling 3 million vehicles per year at an adjusted EBITDA margin of 13.5% within five to 10 years. Dreaming too big? Getting to its goal of selling 3 million vehicles in a year would take a compound annual growth rate (CAGR) of 20% to 40%, according to the company. Investors salivate over this kind of growth. But is it realistic? As Carvana adds inspection, reconditioning, and fulfillment capabilities to its ADESA facilities, the company says it will have the infrastructure to support sales of up to 3 million vehicles. The growth runway is certainly there. Carvana estimates that it commands just 1% of a $1.2 trillion used-car market in the United States -- a small slice of an enormous total addressable market. And Carvana is well positioned for growth, with a presence in more than 300 markets and with 81% of the U.S. population within its delivery range. While the real estate is in place, Carvana will need to ramp up headcount to support its ambitious growth plans, and it's already started doing so, announcing plans in April for an auction and reconditioning "megasite" integration in Phoenix that it expects will create roughly 200 jobs. Although Carvana's labor efficiency has improved dramatically over the past few years, I worry when a CEO declares that "we plan to prioritize growth over margin," which Garcia did in his Q1 shareholder letter. And I have to assume that Carvana will need to aggressively ramp up its marketing spend to achieve the kind of annual sales growth that it's eyeing. Investors will need to watch how the numbers play out. And don't forget that Carvana still had $5.3 billion in long-term debt on the books, as of Q1 2025. Carvana has had some success in rejiggering its debt in the past, but it feels like the company is kicking the can down the road and this could weigh on the company. Investor are expecting a lot While the debt load bears watching, my biggest issue with Carvana is the valuation. At a price-to-earnings (P/E) ratio of 112, Carvana trades at a hefty premium to peers such as CarMax, which has a P/E of 21 looking at trailing 12-month numbers. CVNA PE Ratio data by YCharts After a nice string of earnings beats -- topping estimates -- the average analyst estimate for Carvana's 2025 earnings per share (EPS) is $4.85, which would represent a 206% increase over the 2024 number. With sky-high expectations, it seems like Carvana's stock is priced for perfection. In my opinion, Carvana's stock is at an inflection point. To justify its lofty valuation, the company needs to prove it can balance continued growth and operational efficiency. While Carvana has shown it can do more with less, sustaining margin stability while scaling to 3 million vehicles per year seems like a tall order. If Carvana can hit its ambitious growth targets without losing its financial discipline, the upside could be substantial. But at this valuation, even one wrong turn could take the air out of the rally. Should you invest $1,000 in Carvana right now? Before you buy stock in Carvana, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Carvana wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,692!* Now, it's worth noting Stock Advisor 's total average return is793% — a market-crushing outperformance compared to173%for the S&P 500. 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Yahoo
07-05-2025
- Automotive
- Yahoo
Carvana (NYSE:CVNA) Approves Bylaw Amendments For Officer Exculpation
Carvana approved amendments to its corporate bylaws at its recent Annual General Meeting, introducing an exculpation of certain officers. This move coincided with its stock price surging 59% over the last month. Amid a backdrop of mixed market performance, these governance changes may have provided a confidence boost alongside Carvana's significant expansions, like the Integration at the ADESA Colorado Springs and Phoenix locations. Additionally, the anticipation of the company's upcoming earnings report may have influenced investor optimism, aligning Carvana's recent upward price movement with broader market trends and heightened investor focus. Every company has risks, and we've spotted 3 possible red flags for Carvana (of which 1 makes us a bit uncomfortable!) you should know about. NYSE:CVNA Earnings Per Share Growth as at May 2025 The end of cancer? These 23 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's. The recent amendments to Carvana's corporate bylaws, which exculpate certain officers, might instill greater investor confidence, potentially influencing their forecasts for revenue and earnings. Given the anticipation surrounding Carvana's earnings report and the integration of ADESA locations, these developments could strengthen Carvana's position in the market by boosting operational efficiency and customer satisfaction. The company's integration efforts and AI adoption could contribute positively to revenue growth expectations and profit margin improvement, aligning with the optimism reflected in recent share price movements. Over a longer-term span of three years, Carvana's total return, including share price appreciation and dividends, was very large at 605.59%. This reflects a substantial appreciation in shareholder value, suggesting that the company's focus on expanding its business model and improving efficiency has resonated well with investors. In contrast, over the past year, Carvana has significantly outperformed the US Specialty Retail industry, which achieved a 9.4% return, illustrating the impact of its strategic endeavors on market positioning. With a current share price of US$243.59 and an analyst consensus price target of US$256.06, the stock is trading at a 4.9% discount to the target, indicating a slight underestimation of its future potential according to analyst expectations. Investors should consider how recent governance changes and operational expansions may influence long-term revenue and earnings, with analysts projecting increased profit margins and substantial earnings growth. These assumptions align with the enhanced confidence in Carvana's ability to manage its debt, integrate AI, and leverage ADESA to drive future growth.
Yahoo
23-04-2025
- Automotive
- Yahoo
Carvana Announces Auction-IRC ‘Megasite' Integration in Colorado Springs
COLORADO SPRINGS, Colo., April 23, 2025--(BUSINESS WIRE)--Carvana Co. (NYSE: CVNA), an industry pioneer for buying and selling used cars online, today announced plans for an auction and reconditioning 'Megasite' integration in Colorado Springs. This effort will bring Carvana's Inspection and Reconditioning Center (IRC) capabilities to its existing ADESA Colorado Springs wholesale auction location while maintaining digital and in-lane auction operations on site. The integration will expand Carvana's overall production capacity and enhance its offerings for both retail and wholesale customers in the area. Located in Fountain, ADESA Colorado Springs has served local wholesale auto auction customers for more than 40 years. Spanning approximately 50 acres and over 4,000 parking spaces, the site provides ample infrastructure to support both Carvana IRC operations and ongoing ADESA wholesale auction services. Carvana has already begun hiring new local team members and expects the integration to create approximately 100 new entry level and skilled jobs over time. Incorporating IRC capabilities at ADESA Colorado Springs increases Carvana's total reconditioning capacity, which improves selection for all customers. It also establishes an expanded inventory pool in a new metropolitan area, making Carvana's reconditioning and fulfillment network more efficient and giving local buyers access to more vehicles with faster delivery times. Wholesale customers will continue to enjoy ADESA's in-lane and online auction functionality and will now benefit from even more robust reconditioning operations on-site. "After many years serving retail and wholesale customers in the Colorado Springs area, we are thrilled to expand our local team and capabilities," said Brian Boyd, Senior Vice President of Inventory at Carvana. "This integration will bring a wider selection of vehicles with quick shipping times to local retail customers, provide a more robust offering for local wholesale customers, and also create new job opportunities for entry level and skilled professionals in the local community." ADESA Colorado Springs's efficient transition to an auction-IRC Megasite will be enabled by the site's significant existing footprint and infrastructure as well as by its adoption of Carvana's proprietary CARLI software, which supports efficiency, scalability, and consistency across its IRC network. Forward Looking Statements This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Carvana's current expectations and projections with respect to, among other things, its financial condition, results of operations, plans, objectives, strategy, future performance, and business. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "estimate," "expect," "forecast," "intend," "likely," "outlook," "plan," "potential," "project," "projection," "seek," "can," "could," "may," "should," "would," "will," the negatives thereof and other words and terms of similar meaning. Forward-looking statements include all statements that are not historical facts, including expectations regarding our operational and efficiency initiatives and gains, our strategy, forecasted results, including forecasted Adjusted EBITDA and forecasted retail units sold, potential infrastructure capacity utilization, efficiency gains and opportunities to improve our results, including opportunities to increase our margins and reduce our expenses, trends or expectations regarding inventory, anticipated benefits of integrations, and our long-term financial goals and growth opportunities. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Among these factors are risks related to: our ability to utilize our available infrastructure capacity and realize the expected benefits therefrom, including increased margins and lower expenses; the benefits from our initiatives relating to ADESA; the larger automotive ecosystem, including consumer demand, global supply chain challenges, and other macroeconomic issues (including the imposition of new or increased tariffs); our ability to raise additional capital and our substantial indebtedness; our ability to effectively manage our rapid growth; our ability to maintain customer service quality and reputational integrity and enhance our brand; the seasonal and other fluctuations in our quarterly and annual operating results; our relationship with DriveTime and its affiliates; the highly competitive industry in which we participate, which among other consequences, could impact our long-term growth opportunities; the changes in prices of new and used vehicles; our ability to acquire and expeditiously sell desirable inventory; our ability to grow complementary product and service offerings; and the other risks identified under the "Risk Factors" section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There is no assurance that any forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking statements, which reflect expectations only as of this date. Carvana does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise. About Carvana Carvana's mission is to change the way people buy and sell cars. Since launching in 2013, Carvana has revolutionized automotive retail and delighted millions of customers with an offering that is fun, fast, and fair. With Carvana, customers can find a car, get financing, trade-in, and complete a purchase entirely online with the convenience of delivery or local pick-up as soon as the same day. Carvana's unique offering is powered by its passionate team, differentiated national infrastructure, and purpose-built technology. For more information, please visit About ADESA ADESA is a leader in wholesale auto, providing comprehensive remarketing and logistics solutions that help OEMs, financial institutions, fleets, and dealers source, sell and manage cars efficiently and profitably. ADESA customers across the country enjoy access to its extensive physical auction network, robust digital offerings, and value-added services. ADESA is owned by leading online automotive retailer Carvana (NYSE: CVNA). Learn more about ADESA here. View source version on Contacts MEDIA CONTACT: Carvana Communicationspress@
Yahoo
16-04-2025
- Automotive
- Yahoo
Why Carvana Co. (CVNA) Skyrocketed On Tuesday?
We recently published a list of . In this article, we are going to take a look at where Carvana Co. (NYSE:CVNA) stands against other firms that end stronger on Tuesday. A muted trading persisted on the stock market on Tuesday, with major indices ending in the red, recording minimal losses while digesting President Donald Trump's tariff policies. The Dow Jones declined by 0.38 percent, the S&P 500 dipped by 0.17 percent, while the tech-heavy Nasdaq dipped by 0.05 percent. Ten companies bucked a broader market pessimism, booking modest gains during the session. In this article, we have identified the reasons behind their gains. To come up with the list, we only considered the stocks with $2 billion market capitalization and $5 million trading volume. A customer buying a used car with the help of a finance Shares of Carvana grew by 4.44 percent on Tuesday to close at $213.81 apiece as investor sentiment was fueled by an investment firm's rating adjustment for the company. In a market report on Monday, JMP Securities reduced its price target for CVNA to $275 from $340 previously but gave the company a Buy rating on the shares. The new price target represented a 28.6-percent upside from the company's closing price on Tuesday. According to JMP, its rating adjustment was based on CVNA's bright business prospects, particularly stronger revenues and improved operating efficiency. In recent news, CVNA announced plans to build a new mega-site in Arizona and generate as many as 200 jobs. 'The Phoenix area is home to our headquarters and a significant anchor for Carvana and ADESA operations, so we couldn't be more excited to expand our local capabilities and team here,' said CVNA Senior Vice President for Inventory Brian Boyd. 'Bringing Carvana Inspection and Reconditioning Center capabilities to ADESA Phoenix will drive additional speed and selection for our local retail customers and an even more robust offering for our local wholesale customers while also creating new entry-level and skilled jobs in the Chandler community.' Overall, CVNA ranks 10th on our list of firms that end stronger on Tuesday. While we acknowledge the potential of CVNA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CVNA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
16-04-2025
- Automotive
- Yahoo
ADESA Brings Simulcast to Upgraded Digital Platform and Mobile Apps
PHOENIX, April 16, 2025--(BUSINESS WIRE)--ADESA, a leader in wholesale auto auctions and subsidiary of leading online auto retailer Carvana (NYSE: CVNA), today announced the launch of ADESA Simulcast on its upgraded digital platform and mobile apps. For many years, ADESA Simulcast has given wholesale buyers live, digital access to ADESA's in-lane auctions across the country. With this launch, ADESA's digital platform seamlessly integrates ADESA's two flagship digital auction products alongside a growing range of value-added tools and features within a single, intuitive interface. "ADESA continues to level up its wholesale customer offering by investing in digital products that complement our robust physical footprint and in-lane infrastructure," said Nikki Behrens, Carvana's Senior Director of Marketplaces Strategy & Analytics. "ADESA buyers now have access to Simulcast, Clear, and other key tools and features all in one simple, online interface that will only improve over time as we add new functionality to support the entire wholesale journey – from planning to post-sale." This launch integrates ADESA's core digital products in one easy-to-use platform accessible from and ADESA's mobile apps. Flagship digital auction products on the platform include: ADESA Clear - ADESA's proprietary, timed, online wholesale auction product; and ADESA Simulcast - Live stream digital auction functionality that lets wholesale buyers access and participate in ADESA's in-lane auctions online. Both ADESA Simulcast and ADESA Clear auction experiences benefit from pricing powered by data-driven valuation tools, AI-enabled vehicle recommendations, single-click bidding, and an improved vehicle details page. Every vehicle listing also includes an in-depth condition report with inspection information and detailed visual merchandising powered by Carvana technology. ADESA will continue to invest in enhancements to its digital platform that save time and reduce complexity for wholesale customers. Upcoming feature launches will include expanded self-service functionality designed to streamline post-sale processes and other wholesale customer frictions. For more information or to register for upcoming wholesale auctions, visit About ADESA ADESA is a leader in wholesale auto, providing comprehensive remarketing and logistics solutions that help OEMs, financial institutions, fleets, and dealers source, sell and manage cars efficiently and profitably. ADESA customers across the country enjoy access to its extensive physical auction network, robust digital offerings, and value-added services. ADESA is owned by leading online automotive retailer Carvana (NYSE: CVNA). Learn more about ADESA here. About Carvana Carvana's mission is to change the way people buy and sell cars. Since launching in 2013, Carvana has revolutionized automotive retail and delighted millions of customers with an offering that is fun, fast, and fair. With Carvana, customers can find a car, get financing, trade-in, and complete a purchase entirely online with the convenience of delivery or local pick-up as soon as the same day. Carvana's unique offering is powered by its passionate team, differentiated national infrastructure, and purpose-built technology. For more information, please visit View source version on Contacts MEDIA CONTACT: Carvana Communicationspress@ Sign in to access your portfolio
