Carvana (NYSE:CVNA) stock is up 7% in Friday trading, rising from $362.24 to $387, as two catalysts collide: a fresh partnership with auto insurer Root (NASDAQ:ROOT) and a blowout earnings report that’s still fueling momentum weeks after it dropped.
The move extends a strong recent run. Carvana stock is up 84% over the past year. Yet, the bulls and the skeptics are both showing up today, and for good reason on both sides.
Root Partnership Adds Insurance to the Checkout Lane
The headline catalyst is a new integration between Carvana and Root that embeds auto insurance directly into Carvana’s online car-buying checkout experience. That’s a meaningful extension of the platform. Buying a car and insuring it in the same session removes friction that traditionally sends customers elsewhere.
Root stock is also catching a bid today, rising 6% to $55. Root’s business has been building momentum, with Q3 2025 revenue of $387.8 million beating the $373.88 million estimate and net earned premiums up 29% year over year. Independent agent new writings more than tripled year over year in that same quarter.
For Carvana, the partnership fits a broader strategy of increasing transaction value per customer. If a buyer can lock in coverage without leaving the platform, that’s a stickier experience and a potential new revenue stream layered on top of an already-expanding business.
The Revenue Surge That’s Still Turning Heads
Carvana’s Q4 2025 earnings report continues to set the tone for the stock. The company’s revenue came in at $5.60 billion, a 58% year-over-year increase that beat the $5.28 billion consensus estimate. Moreover, EPS of $4.22 crushed the $1.09 estimate by a wide margin.
Carvana’s full-year 2025 revenue crossed $20 billion for the first time, landing at $20.32 billion. Retail units sold in Q4 hit a record 163,522 vehicles, up 43% year over year. CEO Ernie Garcia put it this way:
“In 2025, Carvana grew 43% year-over-year, delivered record unit economics, and passed significant value back to customers through better selection, faster delivery times, and lower costs.”
The company is also expanding its physical footprint to support growth. Carvana grew its inventory pool locations from 24 to 34 in Q4 and plans 6 to 8 new ADESA integrations in 2026. The long-term target remains 3 million annual retail units at a 13.5% Adjusted EBITDA margin by 2030 to 2035.
The Bear Case: Debt Levels Keep Skeptics Watching
Granted, the enthusiasm isn’t universal. Carvana carries $4.83 billion in long-term debt and a $2.23 billion tax receivable agreement liability, both flagged by management as key risk factors. Total liabilities stand at $8.998 billion, a number that gives pause even as shareholders’ equity has grown to $4.203 billion.
CVNA stock has faced broader market pressure and some valuation skepticism even after the earnings beat. Social sentiment data shows a bearish lean in retail investor communities, with Reddit discussion on Carvana running bearish across 87.5% of tracked mentions in recent weeks. Insider activity tells a similar story: no discretionary insider purchases at market prices were recorded in the past three months, with executives including the CFO and COO selling consistently across price levels ranging from $295 to $418 per share.
That said, the analyst consensus leans bullish. Eighteen analysts rate Carvana stock a Buy versus just one Sell, with a consensus price target of $423.05. Thus, the bull and bear camps are both well-armed heading into next week.
April 29 Earnings: The Next Major Moment
The next real test arrives on Wednesday, April 29 after market close, when Carvana reports its Q1 2026 results. Pre-earnings momentum is clearly building, and the Root partnership gives the narrative an extra layer of optimism heading into the print. For investors watching from the sidelines, that date is the line in the sand.
Watch for whether today’s gains hold into the close and whether the Root integration generates any additional analyst commentary over the coming days. With Carvana’s Q3 2025 EPS weighed down by a $120 million Root warrant fair value decline, the market will be watching how that relationship evolves on the balance sheet, not just the checkout page. No matter how you slice it, April 29 is the moment that will define whether today’s move in CVNA stock is a preview or a head fake.
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