Carvana Q2 Margin Narrows to 10.4%, Stock Drops 15% Despite Record Sales
CVNA is trading near its 52-week low of $54.464 (3.7% above the low).
Summary
Carvana's Q2 revenue jumped 52% to $7.38B, beating estimates, driven by high vehicle demand, but adjusted EBITDA margin contracted to 10.4% from 12.4% a year ago, spooking investors. Shares fell 15% after hours as the market focused on the margin squeeze despite record retail unit sales of 197,325. The company issued its first full-year profit outlook, guiding for $2.7-$3.0B in adjusted EBITDA, and expects sequential unit growth in Q3. The stock was already trading near its 52-week low, and the margin miss raises questions about profitability sustainability even as scale improves.
Updates
· Benzinga — Morgan Stanley cut its price target to $90 and Needham maintained at $120. Shares fell 14.22% on July 30, the second day of trading on the results.
At the time of this announcement, CVNA was trading at $56.49 on NYSE in the Trade & Services sector, with a market capitalization of approximately $72.7B. The 52-week trading range was $54.46 to $97.38. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Reuters.