Carvana Shares Rise on Strong 2024 Core Profit Outlook, According to Reuters

Shares of Carvana experienced a nearly 15% increase following the company’s forecast for annual core profit that exceeded Wall Street expectations, as more consumers lean towards online car shopping.

Baird analyst Craig Kennison highlighted that Carvana is well-positioned for growth in an increasingly digital automotive market, suggesting a promising future for the company.

Over the years, Carvana has implemented several strategies to manage fluctuations in vehicle demand, such as scaling back inventory purchases, pausing hiring, and suspending share buybacks.

The company, recognized for its vehicle vending machines, recently projected its adjusted EBITDA for 2024 to be between $1 billion and $1.2 billion, surpassing analysts’ expectations based on available data.

While demand for used cars has improved in recent months, retailers continue to face challenges due to a broader decline in used vehicle prices.

Currently, the average listing price for used vehicles stands at $25,251, reflecting a 7.6% decrease compared to the previous year.

If the recent gains are sustained, Carvana could see an increase of approximately $4 billion in market value. The stock of the previously struggling car retailer has more than doubled thus far this year.