Carvana Co. (NYSE: CVNA) has just stunned the market with an extraordinary after-hours surge of 32%, following a day of solid gains during Wednesday’s trading session. This surge, which caught many off guard, follows hot on the heels of the company’s impressive Q1 earnings report, where it not only surpassed but shattered both EPS and revenue forecasts.
Financial Performance
In the first quarter, Carvana reported a staggering revenue of $3.06 billion, marking an impressive 17% increase from the previous year’s figures. This substantial revenue growth significantly outpaced the Street consensus, as tracked by FactSet, which had anticipated revenue of $2.67 billion. Moreover, the company reported a remarkable 16% increase in retail vehicle sales, totaling 91,878 units.
Net income also witnessed a dramatic turnaround, standing at $49 million, or 23 cents per share, compared to a loss of $286 million, or $1.51 per share, in the same quarter last year. Additionally, adjusted EBITDA soared to $235 million, a monumental leap from the $24 million loss recorded a year ago.
Future Outlook
CEO Ernie Garcia expressed his elation at the record-breaking results, underscoring Carvana’s unwavering commitment to delivering exceptional customer experiences while simultaneously driving profitability. Looking ahead, Carvana anticipates a sequential increase in its year-over-year growth rate for vehicles sold in the second quarter, accompanied by a corresponding rise in adjusted EBITDA.
The company remains steadfast in its confidence to meet its 2024 forecasts for both units sold and adjusted EBITDA growth.
Market Sentiment
Despite the overwhelmingly positive performance, sentiment within certain circles, particularly on social media, remains cautiously pessimistic. Doubts linger regarding the sustainability of such rapid growth, especially for a used car dealership. These concerns are further exacerbated by a high short float nearing 30%, indicating a significant level of market skepticism.
Conclusion
Nevertheless, Carvana Co.’s remarkable after-hours surge underscores its resilience and potential for sustained success in the fiercely competitive automotive market. By consistently surpassing expectations and delivering strong financial results, Carvana has positioned itself as a formidable player in the industry, capable of weathering market uncertainties and driving continued growth.
