NEW YORK, Jan 28, 2026, 18:24 EST — After-hours
- Carvana shares dropped roughly 14% after a Gotham City Research report cast doubt on the company’s profits and disclosures
- Carvana dismissed the report as “inaccurate and intentionally misleading”
- Investors are now eyeing the Feb. 18 earnings for a clearer reaction
Carvana Co. shares dropped 14.1% to $410.04 in after-hours trading Wednesday following a report from short seller Gotham City Research that raised fresh doubts about the used-car retailer’s profitability. The stock was volatile throughout the day, climbing as high as $482.31 before retreating to $375.07, with roughly 19.8 million shares traded. 1
The timing is crucial as Carvana plans to release its fourth-quarter and full-year earnings on Feb. 18, after the market shuts. The company will hold a conference call at 5:30 p.m. ET. This leaves only a tight timeframe for Carvana to manage any questions that might unsettle momentum-driven stocks. 2
Gotham’s report claims Carvana overstated its 2023-2024 earnings by over $1 billion. It also flagged the company’s heavy reliance on related parties like DriveTime and loan servicer Bridgecrest, a connection investors supposedly underestimated. The firm predicted Carvana’s 2025 Form 10-K filing will be delayed and hinted at potential restatements of earlier financial filings. 3
Carvana fired back. In an emailed statement, it labeled the report “inaccurate and intentionally misleading,” adding that its related-party transactions were fully disclosed. 4
Analysts remained largely positive Wednesday despite the selloff. JPMorgan bumped its price target to $510 from $490, maintaining an Overweight rating and forecasting a “solid beat and raise” for the fourth quarter. Wells Fargo’s David Lantz also raised his target, from $500 to $525, kept his Overweight call, and noted that winter storm Fern might trigger some short-term volatility. 5
The move appeared to be driven by company-specific factors. CarMax climbed 1.4%, with AutoNation and Lithia Motors each ticking up about 0.7%, leaving Carvana as the odd one out among auto retailers.
Trading on a short report carries risks for both parties. Gotham’s terms make clear that readers should expect the firm to benefit if the stock of an issuer falls, and that Gotham may adjust its position at any time without warning. 6
Carvana has seen this kind of storm before. Back in January 2025, Hindenburg Research announced a short position on the stock, alleging insider trading and accounting fraud. Carvana pushed back, calling the accusations misleading and inaccurate, and said they mirrored claims from others aiming to profit off a drop in its shares. 7
Thursday’s session depends on whether the selloff spirals further or fades as investors parse the report’s claims against the company’s disclosures. Traders are also on alert for any follow-up comments that offer more than a brief denial.
Carvana’s next key date is Feb. 18, when it reports after the market closes. Investors will zero in on how management tackles related-party issues — and if there’s any hint of shifts in its audit or filing schedule.
