Carvana’s Stock (CVNA) Makes New High, June Pullback In the Rear-View

Carvana's stock price (CVNA) has made new highs at $359.90, as June's pullback has been bought, and a break and close above $350 puts bulls back in charge.

This represents a gain of 10.5% in a single week, and demonstrating that the 16%+ pullback in June may have been merely a blip on the bigger picture. Year-to-date, Carvana's stock is up 79%, with an even more impressive 192% gain over the past year.

Big moves in CVNA have almost become par for the course, but this turnaround story has not been easy. Looking back over the 5 year chart, it may be hard for some to recall the troubles that had been brewing just a few years ago.

Facing heavy debt and rising interest rates in 2022, the company teetered on the brink of collapse. However, under the leadership of CEO Ernie Garcia, Carvana executed a strategic pivot focused on profitability and operational efficiency. This involved significant cost reductions, particularly in marketing and overhead expenses.

The company's focus on profitability led to a record-high EBITDA margin, restoring investor confidence and fueling the stock's impressive climb. Carvana has set an ambitious long-term goal to sell 3 million vehicles annually within a decade, a substantial increase from the 500,000 it currently sells.

Carvana's recent financial performance has been exceptional, further bolstering investor sentiment. In the first quarter of 2025, the company reported a 46% year-over-year increase in retail units sold, reaching 133,898 vehicles. Total revenue surged to $4.232 billion, up 38% from the previous year. Net income reached $373 million, with an 8.8% margin, while adjusted EBITDA hit $488 million, achieving an 11.5% margin.

These figures represent Carvana's best financial performance to date, demonstrating the success of its strategic shift.

The upcoming second-quarter earnings report, scheduled for July 30, 2025 will be expected to show further improvement. Analysts estimate full year 2025 earnings per share (EPS) to be $2.85, reflecting expectations of continued robust performance. Whilst operational successes have become the norm in recent periods, with the stock at new highs, there will be little room for execution errors if momentum is to hold.