Carvana Stock Update

Carvana Stock Surges 15% After Narrower Quarterly Loss

Carvana Co.’s stock skyrocketed more than 15% in the extended session Thursday after the used-car online retailer reported a narrower quarterly loss than Wall Street expected and said it was on track for growth this year despite macroeconomic conditions.

Financial Results Overview

  • Loss: Carvana CVNA lost $144 million, or $1 a share, in the fourth quarter, compared with a loss of $806 million, or $7.61 a share, in the year-ago quarter.
  • Revenue: Revenue fell 15% to $2.4 billion from $2.8 billion a year ago.
  • Expectations: Analysts polled by FactSet expected Carvana to report a loss of 85 cents a share on revenue of $2.56 billion.

Positive Guidance for Future Growth

  • The company guided for slightly more vehicles sold through retail this year than in 2023, and an adjusted Ebitda “significantly above $100 million.”
  • “Our confidence about driving significantly above $100 million of adjusted Ebitda is driven by our results so far this quarter. We are seeing strength throughout the business,” Carvana said.
  • For fiscal 2024, Carvana expects to grow retail units sold and adjusted Ebitda compared with last year, even as “the macroeconomic and industry environment continues to be uncertain.”

Financial Stability and Growth

  • Carvana and its stock had faced challenges until a deal with bondholders in July to restructure its debt and boost the company’s liquidity, following fears of bankruptcy in late December 2022.
  • Shares of Carvana have seen a remarkable 420% increase in the past 12 months, compared with gains of around 27% for the S&P 500 index SPX in the same period.
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