New York, February 20, 2026, 11:20 (EST) — Regular session
- Carvana slipped roughly 1.6% during Friday’s session, extending losses after a sharp drop that followed its earnings release.
- Inspection, repair and depreciation costs climbed in the fourth quarter, eating into the per-vehicle profit metric.
- Attention turns now to first-quarter cost trends, with the next earnings update on deck.
Carvana Co shares dropped another 1.6% to $327.55 late Friday morning, deepening their slide after earnings. The online used-car seller has faced selling pressure since it warned of elevated costs tied to vehicle reconditioning and depreciation, which hit its fourth-quarter numbers.
This hits hard, especially with the shares already riding high after last year’s rally. Any hint that profit per vehicle might slip, and investors usually head for the exits before digging into details.
Carvana’s results arrived in a climate where “premium” growth stocks can get hammered for even slight hiccups. Traders are eyeing the company’s ability to ramp up unit growth—cost discipline at its production sites remains a key concern.
Carvana reported in a filing that fourth-quarter revenue hit $5.603 billion, with retail units sold reaching 163,522. Total gross profit per unit (GPU), the company’s profitability metric per vehicle, slipped to $6,427 from $6,671 the year before. Adjusted EBITDA, which excludes interest, taxes and certain non-cash items, was up, coming in at $511 million.
Carvana flagged an even stronger push into 2026, telling investors it’s looking for notable gains in both retail units sold and adjusted EBITDA this year. The company also anticipates both numbers will rise quarter-over-quarter in the first quarter, provided that current trends hold.
Costs remain a sticking point. The quarter saw expenses hit roughly $2.16 billion, with the company pointing to pricier inspections, repairs, and detailing at multiple sites, not to mention steeper retail depreciation rates. “We do expect those cost dynamics to play out in Q1,” CFO Mark Jenkins told analysts on the call. Carvana, for its part, once more pushed back against claims from short seller Gotham City Research—Jenkins insisting, “We don’t sell loans to related parties.” Reuters
The stock plunged roughly 8% Thursday after earnings landed. J.P. Morgan, RBC Capital Markets and at least two other brokerages slashed their price targets. Stephens analyst Jeff Lick put it bluntly: “even modest disappointments could trigger sharp reactions” in high-priced names like Carvana. Short interest sits high, around 14.84 million shares—about 10.7% of the free float. With Carvana’s track record as a retail-favorite “meme stock,” swings in either direction can get exaggerated fast. Reuters
Carvana goes up against traditional used-car dealers like CarMax, but the company’s approach centers on centralized reconditioning and delivery. That ups the pressure on production performance, forcing a tough juggling act between speed, quality, and cost.
The risk is clear enough: should reconditioning costs and retail depreciation remain elevated through the first quarter, per-unit profit could get squeezed regardless of whether sales volumes climb. The stock, still a hotly contested trade, could see sharper swings if fresh doubts arise about disclosures or related-party dealings.
Investors now turn their attention to whether Carvana manages to rein in costs at the start of the first quarter and sidesteps any new margin shocks. The company is slated to release its next quarterly results around April 30, Investing.com data shows.
