- Company name
- Carvana
- Sector
- Used car retail
- About
- Carvana is an e-commerce platform for buying and selling cars in the United States. Customers buy, sell, trade in and finance cars online and get them delivered or pick them up. Carvana reconditions cars at its own centers and at integrated ADESA auction sites, and its current footprint has fully built-out capacity for about 1.5 million retail units a year. It also runs the ADESA wholesale auctions, sells new vehicles from seven Stellantis franchise dealerships, makes auto loans to its customers and sells most of the loans to Ally and other buyers. In 2025, it sold 596,641 retail units, and revenue was $20.32 billion. Carvana Co. owned about 65.1% of the operating company, Carvana Group, at September 30, 2026. The head office is in Tempe, Arizona, and Ernie Garcia III is its founder, chairman and chief executive officer.
- Thesis
- Carvana trades above the AI estimate because investors pay for fast growth and for margins that the company says are about twice the industry average. Retail units sold rose 39% to 217,385 in Q3 2026 while the industry was about flat, and net income was $483 million. The company expects 2026 Adjusted EBITDA in the higher end of $2.7 billion to $3.0 billion, and its goal is to sell 3 million retail units a year at a 12.5% operating margin between 2030 and 2035. From the Q4 2026 report, it plans to give no quarterly or annual outlook. For the price to be earned, three things must be true. Unit growth must stay high for several years: the run rate in Q3 2026 was about 870,000 units a year. Margins must hold while interest rates and fuel prices change: these two factors cut unit economics by about $200 per unit in Q3 2026. Ally and the other loan buyers must keep buying the loans that Carvana makes. The Q4 2026 report, expected in February 2027, is the next test. If growth slows, the stock can fall below the AI estimate quickly.
- Valuation
- The intrinsic value for Carvana is an AI estimate from November 10, 2026. It is not an analyst's value. An AI research agent calculated it from Carvana's filings. The method is a multiple of net income for 2027, divided by the number of Class A shares that would exist if all LLC units converted. The third quarter 2026 letter (8-K, October 28, 2026) gives Q3 2026 revenue of $8,040 million, net income of $483 million and 217,385 retail units sold. It says that full conversion of LLC units and other dilutive effects would give 1.127 billion Class A shares, and it expects 2026 Adjusted EBITDA in the higher end of $2.7 billion to $3.0 billion. The Form 10-Q for the quarter ended September 30, 2026 gives net income of $1,401 million for the first nine months, total debt of $5,161 million, cash of $3,049 million, a tax receivable agreement liability of $2,130 million and deferred tax assets of $2,905 million. The fourth quarter 2025 release (8-K, February 18, 2026) gives 2025 net income of $1,895 million, which includes a benefit of about $685 million from tax items. The multiple applies to net income after interest, so the estimate does not subtract the debt again. It does not subtract the tax receivable agreement liability, because the deferred tax assets are larger. Net income for 2026 and 2027, the tax rate and the multiples are assumptions. The estimate assumes 2026 net income of about $1.9 billion. The low case assumes 2027 net income of $2.0 billion, because growth slows and margins fall, at 22 times. It gives $39.04 per share. The base case assumes $2.6 billion, about 37% growth, with retail unit growth near 35%, at 30 times. It gives $69.21 per share. The high case assumes $3.2 billion, with fast growth and higher margins, at 38 times. It gives $107.90 per share. The estimate assumes weights of 25%, 50% and 25%. The weighted intrinsic value is $71.34 per share. The estimate finds no lasting advantage. Carvana has its own reconditioning network, a national delivery network and the ADESA auction sites, and the company says that its margins have been about twice the industry average for 10 quarters. But used car retail has many large competitors, customers can change sellers easily, and the company has made strong profits for only a few years, so the estimate does not expect the advantage to last 10 years.
As of 2026-11-10.
- Risks
- The stock prices several years of fast growth. If unit growth slows or margins fall, the price can fall a lot, and from the Q4 2026 report the company gives no outlook to guide investors.
Carvana sells most of the auto loans it makes. In the first nine months of 2026, it sold $5.7 billion of loans to Ally and $4.5 billion in fixed pool sales. If buyers stop or pay less, Carvana must hold more loans or earn less on each sale. The Ally commitment runs through July 2027.
Higher interest rates and fuel prices lower the profit on each car. Carvana estimates that these two factors cut unit economics by about $200 per unit in Q3 2026, and total gross profit per unit fell by $365.
Holders of Class B stock control most of the votes: at the 2026 annual meeting, Class B stock had 707,088,671 of the 850,082,440 votes outstanding. The tax receivable agreement liability was $2.13 billion at September 30, 2026, of which $1.645 billion was due to related parties.
Laws on the sale, financing and advertising of vehicles can change and can raise costs. Debt included $2.27 billion of 9% senior secured notes due 2031 and the $1.66 billion term loan due 2033.
- Balance sheet
- Cash: $3.0B
Debt: $5.2B
Net debt: $2.1B
Interest cover: 6.6×
Debt due within 12 months: $302M
Carvana funds itself with senior secured notes, a term loan, asset-based facilities and the sale of the auto loans it makes. At September 30, 2026, total debt was $5.16 billion, without finance leases: $2.27 billion of 9% senior secured notes due 2031, a $1.66 billion Term Loan B due 2033, $107 million of senior unsecured notes and $1.13 billion of asset-based financing, including $485 million of real estate financing. Of this debt, $302 million was due within one year. Cash was $3.05 billion. In August 2026, Carvana used the term loan and cash to redeem $1.66 billion of 9% notes due 2030. Short-term revolving facilities for vehicle inventory and finance receivables had commitments of $5.6 billion and unused capacity of $5.5 billion, and loan sale agreements had unused capacity of $6.0 billion with Ally and $8.3 billion with other buyers. Interest cover is operating income divided by net interest expense for the first nine months of 2026 ($1,975 million against $298 million). The tax receivable agreement liability was $2.13 billion, and total stockholders' equity was $5.65 billion. Carvana pays no dividend. On October 26, 2026, there were 722,713,745 Class A shares and 380,547,355 Class B shares outstanding.
As of 2026-09-30.
- Checkpoints
- Oct 28, 2026: Q3 2026 results and 2026 outlook. Passed. Watch: Unit growth near 40% and a kept Adjusted EBITDA outlook pass; a lower outlook fails. Outcome: Retail units rose 39% to 217,385, and Carvana expects 2026 Adjusted EBITDA in the higher end of $2.7 billion to $3.0 billion.
Feb 17, 2027 (estimate): Q4 2026 results and GAAP goals. Pending. Watch: More retail units in Q4 than in Q3 and 2026 Adjusted EBITDA of $2.85 billion or more pass; fewer units or lower EBITDA fail.
Jul 2027 (estimate): Loan sale commitment after July 2027. Pending. Watch: A renewed or new commitment to buy Carvana's auto loans passes; no new commitment fails.
- Recent events
- 2026-10-28: Carvana reported Q3 2026 results. Retail units sold rose 39% to 217,385 and revenue rose 42% to $8.04 billion. Net income was $483 million, after a $53 million loss on the early redemption of notes, and Adjusted EBITDA was $800 million. Diluted EPS was $0.39 per Class A share. Carvana expects more retail units in Q4 than in Q3 and 2026 Adjusted EBITDA in the higher end of $2.7 billion to $3.0 billion. From 2027, it plans to report mainly GAAP measures and changes its goal to 3 million retail units a year at a 12.5% operating margin between 2030 and 2035.
2026-08-14: Carvana entered into a $1.66 billion Term Loan B that matures on August 14, 2033, at Term SOFR plus 2.25%. With the loan and cash, it redeemed all $1.66 billion of its 9% senior secured notes due 2030 for $1.711 billion. In the same quarter, Ally raised its commitment to buy Carvana's auto loans to up to $8 billion through July 2027.
2026-07-29: Carvana reported Q2 2026 results. Retail units sold rose 38% to 197,325 and revenue rose 52% to $7.38 billion. Net income was $513 million and Adjusted EBITDA was $769 million. Carvana expected 2026 Adjusted EBITDA of $2.7 billion to $3.0 billion, against $2.24 billion in 2025.
2026-05-05: Carvana's stockholders approved a five-for-one forward split of the Class A and Class B common stock, and the company effected it in May 2026. They also approved the 2026 Omnibus Incentive Plan.
2026-04-29: Carvana reported Q1 2026 results. Retail units sold rose 40% to 187,393 and revenue rose 52% to $6.43 billion. Net income was $405 million, after a $42 million loss from changes in the fair value of warrants, and Adjusted EBITDA was $672 million.
2026-02-18: Carvana reported 2025 results. Retail units sold rose 43% to 596,641 and revenue rose 49% to $20.32 billion. Net income was $1.895 billion, including a benefit of about $685 million from the release of a valuation allowance on deferred tax assets and the related tax receivable agreement liability. Adjusted EBITDA was $2.24 billion.