Ernest Garcia II Sells Over $34 Million in Carvana Co. Stock

In a recent development, Ernest Garcia II, a notable shareholder of Carvana Co., sold a significant number of shares in the company. The transactions, amounting to over $34 million, took place on September 19 and 20, 2024, with share prices ranging from $165.9938 to $176.1125.

These sales were executed under a pre-arranged trading plan, leading Mr. Garcia to sell shares across several trades during the two-day period. The weighted average selling prices varied each day, with the lowest average price of $165.9938 on the first day and a peak of $176.1125 on the second.

The sales formed part of a series of planned transactions initiated by Ernest C. Garcia II and Elizabeth Joanne Garcia earlier in the year, following a Rule 10b5-1 trading plan. Despite these sales, Mr. Garcia remains a significant stakeholder in Carvana Co., holding interests through direct and indirect ownership, including stakes in trusts and an LLC.

Carvana is recognized for its e-commerce platform focused on buying and selling used cars, positioning it as a key player in the automotive retail sector. The company’s stock, traded under the ticker CVNA, has garnered investor interest amidst the evolving online car sales market.

Investors often keep an eye on the activities of major shareholders for insights into a company’s performance and market confidence. Mr. Garcia’s recent transactions indicate a notable shift in his investment in Carvana Co., though no reasons for the sales have been publicly shared.

According to the latest filings, Mr. Garcia’s remaining assets in Carvana include both Class A and Class B common stock, along with indirect ownership through various family trusts and an LLC. Recent filings also indicate the conversion of Class A Units into Class A Shares of Carvana, impacting the total share count under his ownership.

In related news, Carvana has drawn attention from analysts following strong second-quarter results. BNP Paribas Exane maintained a neutral outlook on Carvana shares, highlighting potential growth risks if Ally Financial, a key collaborator, adjusts its credit policies. Conversely, BofA Securities has reinstated coverage on Carvana with a Buy rating, anticipating notable long-term growth within the used car market.

Evercore ISI has raised its price target for Carvana, attributing this change to the company’s improved lending practices and rising web traffic. This sentiment was mirrored by Stephens, who initiated coverage with an Overweight rating, projecting EBITDA profitability for the company by year’s end.

Jefferies also increased its price target, citing strategic capacity expansion, while showing a 7% increase in their 2025 revenue estimate and a significant 39% jump in EBITDA projections.

Carvana management has guided that third-quarter unit sales will surpass those of the second quarter, projecting a year-over-year growth rate exceeding 25%. For 2024, Carvana’s EBITDA forecasts range between $1 billion and $1.2 billion, surpassing the consensus estimate of $890 million. These recent developments highlight Carvana’s resilience and adaptability within a dynamic market.

Amidst these transactions, investors and market watchers are closely analyzing the company’s financial metrics and market performance. Carvana’s current market capitalization is approximately $36.98 billion, indicating its strong position within the automotive retail industry. Although there has been a slight decline in year-over-year revenue by 1.09%, the company is experiencing robust quarterly revenue growth of 14.89%, suggesting a potential recovery phase ahead. The P/E ratio currently stands at 28.35, indicating that investors are inclined to pay a premium for earnings, likely due to optimistic future earnings prospects. However, an adjusted P/E ratio of -154.11 over the last twelve months as of Q2 2024 may suggest a disconnect between the company’s earnings and its stock price.

Additionally, Carvana stock is trading at a high Price/Book multiple of 69.8, which may attract investors interested in growth potential. Over the past week, the stock has shown a notable return of 14.55%, aligning with a broader trend of 55.01% total return over the past three months.

For investors looking for further insights into Carvana’s stock performance and financial outlook, additional resources are available, offering detailed guidance on the company’s earnings revisions, technical indicators, and long-term profitability forecasts.

This article was generated with the support of AI and reviewed by an editor.