Carvana (CVNA) has been on a tear lately, with CVNA stock accelerating sharply amid improving profitability and robust retail sales growth. The used-car e-commerce platform has captured investors' attention, posting record-setting quarterly results and benefitting from easing cost pressures and operational efficiencies.
As shares of CVNA surge to new highs and analysts revise their outlooks upward, the big question now is whether the stock still has fuel in the tank. Is it time for investors to pump the brakes yet? Let's discuss.
Carvana is a leading U.S. e‑commerce platform specializing in the buying, selling, financing, and delivery of used vehicles. Headquartered in Tempe, Arizona, the company operates one of the most ambitious vertically integrated automotive businesses in the country.
Since its initial public offering (IPO) in 2017, Carvana has undergone a dramatic turnaround, surviving near-bankruptcy to emerge in 2025 with strong profitability margins, streamlined operations, and rapid sales growth. Currently, Carvana's market capitalization is around $76 billion, placing it firmly within the large‑cap category.
Over the past year, shares of Carvana have rallied roughly 159%, with year-to-date (YTD) gains of 70%. Carvana stock closed Aug. 7 at $357.75, reflecting a remarkable rebound from the stock's 2022 bottom when it traded below $4 per share. In 2023, CVNA stock skyrocketed as the company executed a sweeping turnaround, and it has continued the momentum into 2024 and 2025.
Additionally, the dramatic surge this year came after Carvana posted blockbuster second-quarter 2025 results and record retail vehicle sales, all above expectations. Shares spiked 17% on July 31, hitting an all‑time intraday high of $413.34 following the report.
Despite a recent pullback from its peak, Carvana continues to outperform the broader market, with its YTD return well ahead of the S&P 500 Index's ($SPX) 8.5% gain so far this year.
Still, valuation remains elevated. The stock trades at 70 times forward earnings, well above the sector average.
Carvana released its Q2 2025 earnings on July 30, and the results were exceptional. Revenue climbed 42% year-over-year (YOY) to $4.8 billion, surpassing forecasts. EPS hit $1.28, compared to $0.14 in the prior-year quarter and significantly above the consensus. Retail vehicle sales rose 41% to a record 143,280 units, and wholesale volume jumped 44.5% to 72,770 units.