Live Analysis: Will Carvana Soar After Earnings Tonight?
Quick Read
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Carvana (CVNA) reports Q4 earnings tonight after fraud allegations from Gotham City Research sent shares down 14% on January 28. We will be updating this live blog as soon as earnings are released. Simply stay on this page, and new updates will load automatically below.
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Carvana missed Q3 EPS by 20.2% despite beating revenue. Non-GAAP retail GPU fell $77 as depreciation rates increased.
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Carvana’s CFO and COO sold shares at $393 to $419 in early February just weeks before tonight’s report.
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Live Updates
Stock Reaction Analysis: Breaking Down the 20% Drop
Carvana’s 20% post-earnings plunge reflects a market hyper-focused on margin quality over top-line beats. The company delivered $5.60 billion in revenue, crushing the $5.27 billion estimate. Yet investors fixated on the $255 GPU decline to $3,076 – a metric signaling deteriorating unit economics despite volume growth.
Investors appeared to focus on margin quality over top-line results. Carvana’s Q3 already showed adjusted EBITDA margin slipping to 11.3% from 11.7% year-over-year. The back-to-back quarterly GPU declines represent a notable trend in the company’s unit economics.
Bear Case Scorecard: Pre-Earnings Concerns vs. Reality
Before tonight’s earnings, bears focused on two primary concerns. Here’s how Q4 results addressed each:
1. GPU Compression & Margin Quality
Bear Concern: Q3 adjusted EBITDA margin fell 40 basis points year-over-year to 11.3% despite massive revenue growth, signaling operational leverage challenges.
Q4 Reality: GPU plunged $255 to $3,076 — far worse than bears anticipated. Shares dropped 24% immediately after the release.
Verdict: Bear case validated and exceeded. The margin compression trend accelerated dramatically.
2. Insider Selling Signal
Bear Concern: CFO Mark Jenkins and COO Benjamin Huston each sold 13,000+ shares at $393–$418 on February 2, just 16 days before earnings.
Verdict: Validated. Insiders liquidated at prices 18–24% above post-earnings levels.
Finally, Some Relief
Carvana shares kept trending down, but the move finally has reversed slightly.
Shares hit a low of $275 at 4:20 p.m. ET, but are now trading for $281. We’ll see if the reversal holds or is just temporary relief for Carvana shareholders.
GPU down $255
Earlier we commented on Carvana’s GPU, its down $255 to $3,076.
Stocks selling off on any margin weakness has been a continuing theme this earnings season.
Cisco sold off after beating earnings because of relatively minor margin degradation.
It appears Carvana is the latest victim of this trend.
Shares are now down 24%.
Selling Continues
It’s a brutal reaction to Carvana, but in our preview we said GPU would be a key metric and that’s what investors are watching.
After the earnings release shares are a straight line down. They’re now off 18.4% as of 4:12 p.m. ET.
Carvana Earnings Are Out - Here are the Most Important Figures
Carvana earnings just hit newswires, here’s what the company reported.
- Revenue: $5.60
- EPS: $4.22
As a reminder, here’s what Wall Street expected.
- Revenue: $5.27 billion
- EPS: $1.12
The EPS figure isn’t going to be comparable. Here’s the problem, gross margins per vehicle have been crushed again.
Shares are initially down 17%.
The only guidance provided was long-term sales.
Carvana Earnings Expected At About 4:05 p.m. ET
Carvana’s earnings are expected around 4:05 p.m. ET.
As a reminder, we’ll post news and analysis shortly after earnings hit newswires. To receive updates, simply stay on this page, and they’ll appear in this section automatically.
Carvana Shares Up 3.7% Today
Carvana shares are rallying ahead of earnings. While shares opened lower, they quickly rose to about 3.7% gains and have traded in a tight range for most of the day.
However, even after today’s gains, Carvana’s stock is still down 18% across the past month. As we noted in our write-up below, management will need to firmly refute growing skepticism around the company on tonight’s call.
Carvana (NYSE: CVNA) reports Q4 2025 earnings tonight after the bell. The online used car retailer has had a monster run over the past few years, but shares have pulled back recently, down 18.7% over the past month.
The stock’s recent weakness follows fraud allegations from short seller Gotham City Research on January 28, which sent shares tumbling 14% that day. Tonight’s report will be the first chance for management to directly address those concerns.
What Wall Street Expects
Analysts are looking for over 150,000 retail units sold in Q4, based on management’s guidance from the Q3 call. The company also guided to full-year 2025 adjusted EBITDA at or above the high end of the $2.0 to $2.2 billion range. Prediction markets show 56.5% probability of beating the $1.08 consensus EPS estimate, suggesting modest optimism despite last quarter’s miss.
The headline figures to watch are Wall Street consensus for revenues of $5.27 billion and EPS of $1.12.
The key metric I’ll be watching is gross profit per unit. In Q3, non-GAAP retail GPU decreased by $77 driven by higher depreciation rates, while wholesale GPU fell $168. Management warned on the Q3 call that Q4 typically sees higher depreciation and lower demand, so sequential GPU compression is expected. The question is whether it stays manageable or accelerates.
Last Quarter’s Mixed Results
Q3 delivered a revenue beat but an earnings miss. Carvana reported $5.647 billion in revenue, crushing the $5.1 billion consensus. But EPS came in at $1.03, missing the $1.36 estimate by a mile.
The company sold 155,941 retail units, up 44% year over year, and posted record $552 million in operating income and $637 million in adjusted EBITDA.
The stock sold off hard after that report, dropping 13.9% the day after filing and 18.5% a week later. It eventually recovered, but the Q3 miss broke a six-quarter earnings beat streak dating back to Q1 2024.
What to Watch Tonight
Beyond the numbers, I’ll be listening for management’s tone on the Gotham allegations. The company called them “inaccurate and intentionally misleading”, but investors need more than a one-liner. Transparency around related-party transactions with DriveTime and Bridgecrest will be critical.
Operationally, watch for commentary on same-day delivery expansion. CEO Ernie Garcia highlighted on the Q3 call that 40% of Phoenix customers now get same or next-day delivery, compared to 10% nationwide. That capability is a competitive advantage, but it’s expensive. I want to hear how logistics costs per unit are trending as they scale that service.
Eric Bleeker has been investing for more than 20 years. He began his career working at Microsoft before joining Motley Fool, one of the largest publishers of financial research. In his 15 years at Motley Fool Eric served as the General Manager for Fool.com and led coverage in the Technology & Telecom sector. In addition, he was a featured columnist and has hosted dozens of investing seminars attended by more than a million total investors. Eric has more than 1,000 financial bylines to his name and has been featured in The Wall Street Journal, CNBC, Fox Business, and many other leading publications. He is currently focused on artificial intelligence investing and is a CFA Charterholoder.
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