Updated December 6, 2025
Carvana Co. (NYSE: CVNA) has stepped back into the market’s spotlight after S&P Dow Jones Indices confirmed the online used‑car platform will join the S&P 500 on December 22, 2025. The announcement sent the stock up roughly 10% in after‑hours trading and left shares trading around the $400 mark, a dramatic rebound from a 2022 low below $4. [1]
After nearly quadrupling in 2024 and climbing around 80%–85% so far this year, Carvana has transformed from a distressed “meme stock” into one of the market’s most hotly debated turnaround stories. [2] This article pulls together the key news, forecasts and analyses as of December 6, 2025, to help readers understand what is driving CVNA now—and what to watch heading into 2026.
Carvana stock today: price, performance and volatility
As of the latest trade, Carvana’s Class A shares change hands at about $399.77, after swinging between an intraday low near $397 and a high around $448. MarketBeat data places Carvana’s market capitalisation close to $87 billion, reflecting how far the company has come from its crisis days. [3]
Over a longer horizon, the rally is even more striking. Reuters notes that Carvana’s stock has nearly quadrupled in 2024 and risen roughly 78% in 2025 on the back of improved profitability and cost controls. [4] MarketWatch adds that the shares have surged about 86% year‑to‑date and more than recovered from their dramatic collapse in 2022. [5]
The ride has been anything but smooth. The stock has repeatedly sold off on short‑seller campaigns, macro worries and valuation fears—even when the company beat earnings expectations—underlining just how sentiment‑driven CVNA remains. [6]
Latest catalyst: S&P 500 inclusion on December 22, 2025
The biggest near‑term driver is index inclusion. S&P Dow Jones Indices announced that Carvana will join the S&P 500 before the market opens on December 22, 2025, alongside CRH and Comfort Systems USA, as part of the index’s quarterly rebalancing. [7]
MarketWatch and Investors Business Daily report that the news sent Carvana shares up more than 10% in after‑hours trading, with investors anticipating forced buying from index funds and benchmark‑hugging active managers. [8]
Inclusion in the S&P 500 is meaningful for several reasons:
- It confirms that Carvana now meets the index’s market‑cap, liquidity and profitability requirements after years of losses. [9]
- It tends to increase share liquidity and institutional ownership, as passive and closet‑index funds add the stock. [10]
- It can boost visibility with both investors and customers, which is especially useful for consumer‑facing brands.
However, history shows that S&P additions sometimes spike ahead of the effective date and then trade sideways or lower once index buying is complete. Investors are already debating whether the latest surge prices in most of this benefit.
Fundamentals: record Q3 2025 results and raised outlook
Carvana’s S&P 500 promotion is underpinned by a powerful operational turnaround.
Record Q3 2025 numbers
For the quarter ended September 30, 2025, Carvana reported its strongest quarter ever: [11]
- Retail units sold: 155,941 (up 44% year‑over‑year)
- Revenue: $5.647–$5.65 billion (up 55% year‑over‑year, above consensus near $5.1 billion)
- Total gross profit: about $1.15 billion, up 42% year‑over‑year
- Gross profit per unit (GPU): roughly $7,362, down slightly from the prior year
- GAAP operating income: $552 million (operating margin 9.8%)
- Adjusted EBITDA: $637 million (margin 11.3%)
- Net income: $263 million (net margin 4.7%), roughly $1–$1.1 in GAAP EPS
The quarter also included a non‑cash negative impact of about $120 million from the decline in the fair value of Root Inc. warrants tied to their partnership, which weighed on reported net income. [12]
Different data services publish slightly different EPS numbers, but several agree that Carvana beat revenue expectations comfortably and delivered solid profitability, even as margins compressed slightly from 2024’s peak. [13]
Updated guidance
Based on its momentum, Carvana guided for: [14]
- Q4 2025 retail units: “above 150,000”
- Full‑year 2025 adjusted EBITDA: at or above the high end of its prior $2.0–$2.2 billion range
Management reiterated a long‑term goal of selling about 3 million retail units per year at an adjusted EBITDA margin of 13.5% within five to ten years, highlighting what it sees as the earnings power of its vertically integrated model. [15]
Market reaction: strong numbers, lingering doubts
Despite the strong headline metrics, the stock actually dropped 7–9% in after‑hours trading when Q3 results first hit, as investors focused on: [16]
- Slight pressure on adjusted EBITDA margin
- Net income that fell short of some bullish expectations
- The launch of a fresh short campaign by noted investor Jim Chanos, who has warned about red flags in Carvana’s business, particularly if the auto credit cycle turns. [17]
In other words, earnings strength alone has not been enough to end the tug‑of‑war between bulls and bears.
Balance sheet: from near‑distress to “adequate” liquidity
Carvana’s survival story is rooted in aggressive balance‑sheet surgery.
2023–2025 debt exchanges
In July 2023, Carvana struck a major agreement with noteholders to reduce total debt by more than $1.2 billion, eliminate over 83% of its 2025 and 2027 unsecured note maturities, and cut annual cash interest by more than $430 million for two years. [18]
The exchange swapped existing unsecured bonds into new secured notes backed by Carvana and ADESA assets, extending maturities and buying the company time to execute its turnaround. [19]
Subsequent transactions in 2025 further refined Carvana’s capital structure and continued to lower near‑term interest burdens. [20]
Rating agencies: progress, but still speculative
By March 2025, S&P Global Ratings upgraded Carvana to ‘B’, still a speculative grade but a sign of improving credit quality. The agency projected debt‑to‑EBITDA of about 4.6× in 2025 and 4.5× in 2026, with free operating cash flow to debt in the high‑single‑digit percentages, and described the company’s liquidity as “adequate.” [21]
Short‑seller Hindenburg Research, however, has highlighted that as a result of the restructuring structure, Carvana resumed paying cash interest from 2025, estimating annual interest obligations of roughly $215 million on about $2.4 billion of long‑term debt. [22]
The upshot: Carvana is no longer on the brink of insolvency, but it still carries meaningful leverage and must sustain strong cash generation to keep bondholders comfortable.
Wall Street’s view: generally bullish, but valuation is a flashpoint
Consensus ratings and price targets
Across major data providers, analysts are broadly positive on Carvana, but they disagree on how much upside is left from current levels:
- MarketWatch shows an average target price around $421 and an “Overweight” consensus based on roughly two dozen analysts. [23]
- StockAnalysis reports a consensus “Buy” rating with an average 12‑month target near $411, implying only a low‑single‑digit percentage upside from current prices, with target estimates spanning roughly $275 to $500. [24]
- MarketBeat lists a “Moderate Buy” average rating, with about 18 Buy and 6 Hold recommendations and a consensus target close to $422. [25]
In short, most covering analysts think Carvana is a buy or overweight, but the average target price is only a bit above the current share price after the recent run.
Fresh upgrades: UBS and others
UBS initiated coverage of Carvana this week with a “Buy” rating and a $450 price target, implying mid‑teens upside from pre‑announcement levels. [26]
In a widely cited MarketWatch piece, UBS analyst Joseph Spak called Carvana a “true disruptor” in the used‑car market, praising its e‑commerce platform and customer experience. He estimates that Carvana currently holds around 1.5% of total U.S. used‑vehicle sales (about 3% of the retail segment) and argues that this could rise to 4% by 2030 and potentially 8% over the longer term as online car buying—currently only about 2% of the market—gains traction. [27]
Other firms, including Needham, Barclays, Citigroup, JPMorgan and Wedbush, have also issued Buy or Overweight ratings in recent months, with several setting targets between $400 and $500. [28]
Valuation worries and short interest
Not everyone is convinced the rally is justified. A recent AI‑assisted analysis on AInvest framed Carvana as trading at a large premium to peers, citing valuation metrics such as: [29]
- A price‑to‑earnings multiple many times higher than rival CarMax
- A price‑to‑sales ratio above 2×, implying investors are paying a rich multiple for growth
- Short interest in the mid‑single‑digit percentage of float, reflecting ongoing skepticism
The same piece underscores the divide between momentum‑oriented investors, who focus on Carvana’s rapid growth and margins, and value‑oriented investors, who worry about paying up for a business still exposed to credit and regulatory risks.
The bull case for Carvana stock
Putting recent research together, the bullish thesis on Carvana tends to rest on five pillars:
- Structural shift to online car buying
Only a small share of used‑car transactions happens fully online today, but UBS and others argue that consumer comfort with e‑commerce will steadily expand that share. Carvana’s brand recognition, vending‑machine marketing, and end‑to‑end digital experience could let it capture outsized share of that shift. [30] - Rapid market‑share gains and operating leverage
With retail units up 44% year‑over‑year and evidence of operating leverage in Q3 (higher revenue with margins still near double digits), bulls see a business that can keep scaling while keeping per‑car costs under control. [31] - Improved profitability and cash generation
Carvana has now delivered multiple quarters of positive net income, adjusted EBITDA and free cash flow, helped by a leaner cost base and more disciplined inventory acquisition. Reuters notes that improved profitability and cost cutting were key drivers of the stock’s multi‑year rebound. [32] - Balance‑sheet repair reduces existential risk
The 2023 debt exchange and subsequent moves significantly lowered near‑term default risk, reduced interest costs and pushed out maturities. S&P’s upgrade to ‘B’ reflects a view that default risk, while still present, is much lower than it was during the 2022–2023 crunch. [33] - Long runway vs traditional rivals
Bulls emphasize that Carvana’s asset‑light online model, growing reconditioning capacity and national logistics network could allow it to eventually challenge CarMax for the top spot in used‑car sales. Some analysts even project Carvana could surpass CarMax’s quarterly used‑unit volumes by around 2026–2033, depending on the scenario. [34]
From this perspective, today’s valuation reflects a long‑duration growth story, not just next year’s earnings.
The bear case: accounting quality, credit risk and competition
On the other side, skeptics argue that Carvana’s apparent turnaround is fragile and its valuation leaves little margin for error.
Earnings quality and loan‑sale gains
A detailed “bear case” write‑up circulated via Yahoo Finance recently argued that about 93% of Carvana’s 2025 year‑to‑date net income comes from gains on loan sales, suggesting that the core auto retail business is still structurally weaker than headline profits suggest. [35]
Hindenburg Research’s January 2025 report went further, accusing Carvana of using aggressive accounting, lax underwriting standards, and questionable related‑party dealings to support its profitability—a charge the firm framed as an “accounting grift.” [36] Subsequent coverage on Yahoo Finance and AInvest has echoed concerns over loan‑sale dependence, subprime credit exposure and governance. [37]
These are allegations by short sellers and commentators, not established legal findings, but they have resonated with investors wary of complex financial engineering in consumer‑credit businesses.
Credit cycle and macro risks
Carvana’s model depends heavily on customers accessing auto financing and on the company’s ability to sell or securitize those loans at attractive terms. Critics such as Jim Chanos argue that: [38]
- Rising delinquencies in subprime auto lending could hurt both volumes and loan sale economics.
- A downturn could drive higher used‑car price volatility, impacting residual values.
- The bankruptcy of other auto lenders has highlighted how quickly conditions can deteriorate when credit tightens.
Carvana itself has warned that financial pressures on lower‑income consumers and stress in parts of the auto‑finance sector could weigh on results. [39]
High valuation and insider selling
From a valuation standpoint, bear‑leaning analyses highlight that Carvana trades at multiples far above traditional auto retailers, with forward P/E and price‑to‑sales ratios many times those of CarMax and other peers. [40]
Recent insider share sales have added to the unease. MarketBeat reports that Director Michael Maroone sold about 30,928 shares at roughly $400, a transaction of more than $12 million, while other insiders have also trimmed positions. [41] Insider selling does not automatically signal trouble, but in richly valued, controversy‑prone stocks, it tends to attract scrutiny.
Rising competition, including Amazon Autos
Even bulls concede that competition is tightening. Amazon launched Amazon Autos in late 2024 and has since partnered with Hyundai, Hertz, Ford and others, creating a powerful new online channel for vehicle purchases. [42]
Several reports describe Amazon as building toward a national automotive marketplace and even negotiating with large dealer groups and online platforms such as Carvana and CarMax, raising questions about how value will be split among partners and platforms over time. [43]
If Amazon or another large tech player ultimately dominates online car shopping, Carvana may need to share economics—or risk being sidelined.
Key things for investors to watch in 2026
Regardless of one’s stance on the stock, a few signposts are likely to dominate the Carvana narrative in 2026:
- Execution vs. long‑term targets
Can Carvana keep retail unit growth above industry averages while nudging adjusted EBITDA margins toward its long‑term 13.5% goal? Q4 2025 and 2026 guidance will be closely watched for signs of either acceleration or fatigue. [44] - Cash flow and leverage
With debt still elevated and cash interest payments now back on, sustained positive free cash flow will be critical. Rating agencies and bond markets will provide early warnings if confidence slips. [45] - Regulatory and legal developments
Any formal actions or investigations related to Carvana’s accounting, related‑party arrangements or loan‑origination practices could materially affect sentiment and valuation. Short‑seller reports have already put a spotlight on these issues. [46] - Competitive landscape and partnerships
Updates on Amazon Autos, potential partnerships, and strategic moves by CarMax and traditional dealers will shape expectations for Carvana’s market share. Wedbush and others are explicitly modeling scenarios where Carvana eventually matches or surpasses CarMax’s volumes; any change in that trajectory will matter. [47] - Index flows and post‑S&P trading
After December’s S&P 500 inclusion, investors will be watching how CVNA trades once passive inflows settle. Stocks sometimes experience short‑term pressure after index inclusion as arbitrage trades unwind.
Bottom line
As of December 6, 2025, Carvana sits at the intersection of huge operational progress and equally huge controversy:
- It is now profitable, growing much faster than the broader used‑car market, and about to enter the S&P 500. [48]
- Analysts are generally bullish, with many high‑profile firms rating the stock a buy and projecting further gains. [49]
- At the same time, short sellers, valuation skeptics and credit bears argue that earnings quality, leverage and competition are being underestimated. [50]
For readers following CVNA, the crucial question is not simply whether the company can keep selling more cars online, but whether it can sustain high‑quality earnings and robust cash flow through a full credit cycle in a market that is drawing in giants like Amazon.
References
1. press.spglobal.com, 2. www.reuters.com, 3. www.marketbeat.com, 4. www.reuters.com, 5. www.marketwatch.com, 6. www.barrons.com, 7. press.spglobal.com, 8. www.marketwatch.com, 9. press.spglobal.com, 10. www.marketwatch.com, 11. www.carvana.com, 12. investors.carvana.com, 13. fintool.com, 14. fintool.com, 15. investors.carvana.com, 16. www.barrons.com, 17. www.investors.com, 18. investors.carvana.com, 19. www.sec.gov, 20. www.carvana.com, 21. www.spglobal.com, 22. hindenburgresearch.com, 23. www.marketwatch.com, 24. stockanalysis.com, 25. www.marketbeat.com, 26. finance.yahoo.com, 27. www.marketwatch.com, 28. www.quiverquant.com, 29. www.ainvest.com, 30. www.marketwatch.com, 31. www.carvana.com, 32. www.reuters.com, 33. investors.carvana.com, 34. www.ainvest.com, 35. finance.yahoo.com, 36. hindenburgresearch.com, 37. finance.yahoo.com, 38. finance.yahoo.com, 39. www.barrons.com, 40. www.ainvest.com, 41. www.marketbeat.com, 42. www.marketwatch.com, 43. blog.fleetbold.com, 44. investors.carvana.com, 45. www.spglobal.com, 46. hindenburgresearch.com, 47. www.marketwatch.com, 48. www.carvana.com, 49. stockanalysis.com, 50. finance.yahoo.com
