Carvana Co. (NYSE: CVNA) is closing out 2025 under a brighter spotlight than almost any other consumer stock—thanks to its newly minted S&P 500 membership, a string of fresh Wall Street price-target hikes, and a business turnaround that has reshaped how investors talk about online auto retail.
As of Dec. 23, 2025, Carvana shares were trading around $425, down roughly 2% on the session at the time of writing, with a market cap shown near $63 billion by market data feeds.
What follows is a detailed, up-to-date look at the news, forecasts, and key analyses driving Carvana stock right now—plus what investors are likely to watch most closely heading into 2026.
Why Carvana stock is making headlines this week
Carvana officially joined the S&P 500—effective Dec. 22
Carvana’s promotion into the S&P 500 became effective prior to the open on Dec. 22, 2025, as part of index changes announced by S&P Dow Jones Indices. In that announcement, S&P said Carvana would replace Dentsply Sirona (XRAY) in the index. [1]
That matters for CVNA stock because S&P 500 inclusions often trigger mechanical demand from passive funds and index-tracking strategies that must buy new constituents to stay aligned with the benchmark. Reuters noted expectations that the inclusion would spur purchases from index-tracking funds. [2]
The “turnaround-to-megacap” narrative is now central to the stock
Carvana’s S&P 500 entry is also symbolic. Reuters framed the move as the latest milestone in a dramatic reversal since 2022, when the company faced debt-default and bankruptcy concerns; the same Reuters piece described how the stock has surged more than 8,000% since its 2022 lows. [3]
That kind of move creates two competing forces in the stock:
- A new institutional stamp of approval (index inclusion, broader ownership)
- A valuation and expectations set high enough that even “good” news can be judged harshly
Carvana’s fundamentals: what the company reported most recently
Carvana’s latest reported quarter remains the foundation under the bull case: rapid unit growth plus meaningful profitability, not just revenue expansion.
Q3 2025: record units, record revenue, and strong margins
In its Q3 2025 release (for the quarter ended Sept. 30, 2025), Carvana reported:
- 155,941 retail units sold (+44% YoY)
- Revenue of $5.647 billion (+55% YoY)
- Net income of $263 million (net margin 4.7%)
- Adjusted EBITDA of $637 million (margin 11.3%)
- GAAP operating income of $552 million (margin 9.8%) [4]
The company noted that its Q3 net income included a $120 million non-cash negative impact tied to changes in the fair value of Root warrants. [5]
Q4 / full-year outlook: management pointed to volume and EBITDA targets
In the same release, Carvana said that—assuming a stable environment—it expected:
- Q4 retail units sold above 150,000
- Full-year 2025 adjusted EBITDA at or above the high end of its previously communicated $2.0–$2.2 billion range [6]
The long-term ambition: scale, capacity build-out, and margin goals
Carvana’s Q3 shareholder letter emphasized that the company had crossed a $20 billion annual revenue run rate and reiterated its longer-term march toward scale. It also stated:
- It expects to end the year with capacity for over 1.5 million retail units annually
- It has added production capabilities to 15 ADESA locations and plans to continue expanding at a similar pace
- It remains focused on a long-term goal of selling 3 million cars per year at a 13.5% adjusted EBITDA margin within 5 to 10 years [7]
For investors, this is the strategic framing: Carvana isn’t pitching itself as a niche online dealer—it’s pitching itself as a scaled, vertically integrated used-car retailer with improving economics.
Wall Street forecasts on Dec. 23: price targets rise, but the range stays wide
Carvana’s S&P 500 entry arrived alongside a cluster of recent analyst actions—some bullish, some more cautious, and nearly all acknowledging the central tension in CVNA: improving execution vs. a valuation that demands more improvement.
New and notable analyst calls in December 2025
Citi: $550 target (raised from $445), Buy
A widely circulated note summarized by Insider Monkey said Citi raised its price target to $550 (from $445) while maintaining a Buy rating, citing a sales tracker indicating November growth of 37%, up from 32% in October, and higher EBITDA estimates. [8]
Morgan Stanley: assumed coverage at Overweight, $450 target
TipRanks/TheFly reported Morgan Stanley assumed coverage with an Overweight rating and a $450 price target as part of the firm’s 2026 outlook work in autos and shared mobility. [9]
Wedbush: raised target to $500 from $400, Outperform
TipRanks/TheFly also reported Wedbush raised its price target to $500 from $400 and kept an Outperform rating. [10]
Argus: initiated Buy, $500 target
An Investing.com report said Argus initiated coverage at Buy with a $500 price target, while also flagging valuation concerns and justifying a premium multiple based on what it called a “promising growth runway.” (The same report referenced other bullish coverage actions in the name.) [11]
Evercore ISI: nudged target to $425 from $420
MarketScreener reported Evercore ISI adjusted its price target to $425 from $420 on Dec. 23. [12]
Wedbush earlier “new used car king” framing and market-share thesis
Investopedia reported in late November that Wedbush upgraded Carvana to Outperform, raised its target to $400 (from $380), and described Carvana as the “new used car king,” with analysts projecting Carvana could surpass CarMax’s quarterly used-unit volume by 4Q26. [13]
Consensus targets: bullish tilt, but disagreement is meaningful
One reason CVNA remains volatile is that “consensus” can mask how wide the spread is between optimistic and conservative analysts.
- A Simply Wall St analysis published Dec. 23, 2025 cited a consensus price target around $414 while noting a spread from roughly $330 on the low end to $500 on the high end. [14]
- MarketBeat’s forecast page, meanwhile, listed an average price target around the mid-$400s and cited a broader low-to-high range extending to $275–$550, depending on which analysts are included. [15]
The takeaway for readers: the Street is not aligned on what “fair value” looks like after the 2025 surge—especially once you account for rate sensitivity, credit conditions, and how durable margins will be.
The 2026 setup: used-car demand, pricing, and consumer affordability
Carvana is levered not only to execution, but to the broader auto and consumer-credit environment. Heading into 2026, several macro signals matter.
Used-vehicle sales and inventory: “tight but steady” is a key theme
Cox Automotive’s 2026 outlook expects slightly lower used-vehicle sales year over year (about -1%) and notes used retail inventory may remain relatively tight, with demand supported by affordability pressure pushing more buyers toward used vehicles. [16]
For Carvana, tighter inventory can cut both ways:
- It can support pricing and turn rates if sourcing stays strong
- But it can also raise acquisition costs and challenge gross profit per unit if supply tightness spikes
Wholesale values: a modest rise is projected
Cox also projected the Manheim Used Vehicle Value Index could rise about 2% by year-end 2026, implying relatively normal depreciation patterns compared with the extreme volatility of earlier years. [17]
Interest rates and affordability remain the swing factor
Edmunds’ forecast expects U.S. new-vehicle sales around 16 million units in 2026, while emphasizing that affordability remains the biggest constraint even as interest rates begin to ease. [18]
Even if Carvana is “used-focused,” the new-car market affects trade-ins, consumer behavior, and pricing dynamics across the ecosystem.
Late-2025 used-car pricing: mixed signals by segment
Investopedia noted late-2025 pricing shifts: some categories (like sedans and smaller SUVs) improved in November, while trucks and larger SUVs remained firmer. It also pointed to hybrids/EVs seeing the biggest month-to-month decline (1.8%) and referenced policy-driven effects tied to changes in federal tax credits. [19]
The biggest debate around Carvana stock: valuation vs. execution
The central investor argument in late 2025 isn’t whether Carvana improved—it’s how much improvement is already priced in.
Reuters: a premium multiple vs. legacy auto names
Reuters reported that Carvana traded at 57.4 times forward earnings in early December—far above the single-digit multiples of Detroit automakers mentioned for comparison in the same piece. [20]
Trefis: “near-perfect execution” language reflects the bear concern
A Trefis analysis argued the stock’s 2025 rally pushed valuation into territory that assumes exceptionally strong ongoing execution, describing Carvana as “stretched on fundamentals alone” and highlighting very high multiples on earnings and free cash flow in its framework. [21]
Simply Wall St: “priced for years of growth” framing
Simply Wall St’s Dec. 23 valuation check captured the same idea in plainer terms: index inclusion and momentum are real, but the valuation “bakes in years of high growth,” leaving less margin for disappointment. [22]
Risks investors are watching right now: insider selling, short interest, and business-model sensitivity
Insider selling: COO’s Dec. 12 sale disclosed via SEC filing
A Form 4 filed with the SEC shows Carvana’s COO Benjamin E. Huston exercised options and sold 20,000 shares on Dec. 12, 2025 at a reported price of $475, noting the trades were executed under a Rule 10b5-1 plan adopted in December 2024. [23]
Insider sales don’t automatically equal bearish conviction—especially when tied to pre-scheduled plans—but they often get extra attention when a stock has surged and joined a major index.
Short interest: no longer “meme-stock extreme,” but not trivial
MarketBeat’s short-interest page reported that as of Nov. 28, 2025, Carvana had about 13.72 million shares sold short, representing 7.54% of the public float, with a days-to-cover figure around 4.4. [24]
That’s not the kind of short interest that guarantees a squeeze by itself—but it is enough to amplify swings when sentiment shifts quickly.
Cash flow and margin durability: the “next test” in 2026
A Nasdaq-hosted Motley Fool analysis (Dec. 9) argued that while headline results looked strong, some fiscal metrics warrant monitoring—specifically noting a decline in operating cash flow (first nine months of fiscal 2025 versus the year-ago period) and a slight dip in adjusted EBITDA margin year over year, raising the question of how reliably margins expand with scale. [25]
Short-seller history still hangs over the name
Reuters also referenced the January short report from Hindenburg Research and Carvana’s response disputing it—part of the broader backdrop of scrutiny that tends to return whenever the stock becomes a market focal point again. [26]
Competitive reality check: CarMax’s struggles highlight Carvana’s momentum—but also raise the bar
Carvana bulls frequently frame the story as “share-taking,” and in late 2025, competitor performance has helped reinforce that narrative.
Barron’s reported that CarMax posted an earnings beat recently, but the stock has been weak on the year amid declining sales and CEO turnover. The same report contrasted CarMax’s performance with Carvana’s strength—describing Carvana as a competitor that has shown growth and major stock gains in 2025. [27]
If CarMax continues to struggle operationally, the share-shift thesis may look more credible. But it also means investors will demand that Carvana prove scale economics—especially as the easiest “comparison wins” get priced into the stock.
What investors will watch next for Carvana stock in early 2026
Here are the catalysts and checkpoints most likely to drive CVNA headlines and price moves over the next several months:
- Q4 2025 unit volume — management set expectations for retail units above 150,000. [28]
- Full-year 2025 adjusted EBITDA outcome — the company pointed to at/above the high end of the $2.0–$2.2B range. [29]
- Gross profit per unit and margin durability — investors will look for evidence that profitability scales, not just revenue. [30]
- Market-share trajectory vs. CarMax — multiple analysts have floated the possibility of Carvana overtaking CarMax on quarterly used-unit volume by 4Q26. [31]
- Used-car price and supply signals — especially whether 2026 looks like “normal depreciation” (a modest rise in Manheim index per Cox) or another volatile cycle. [32]
- Credit conditions and affordability — rates, delinquencies, and consumer payment pressure remain crucial for used demand and finance attach. [33]
- Post–S&P 500 ownership dynamics — index inclusion can broaden ownership, but it can also change the stock’s trading behavior and volatility profile. [34]
Bottom line on Dec. 23, 2025
Carvana stock is in a rare position: it’s simultaneously a validated institutional story (now an S&P 500 constituent) and a high-expectations momentum trade that can react sharply to any hint of slowing growth, margin compression, or macro stress.
The company’s recent results show real operational progress—record unit sales, record revenue, and double-digit adjusted EBITDA margins. [35]
But the stock’s valuation and the widening spread in analyst targets make one point clear: 2026 will be judged less on “growth” and more on the quality and durability of that growth—especially cash flow, finance economics, and how efficiently Carvana can expand at scale. [36]
This article is for informational purposes only and does not constitute investment advice.
References
1. press.spglobal.com, 2. www.reuters.com, 3. www.reuters.com, 4. investors.carvana.com, 5. investors.carvana.com, 6. investors.carvana.com, 7. investors.carvana.com, 8. www.insidermonkey.com, 9. www.tipranks.com, 10. www.tipranks.com, 11. www.investing.com, 12. www.marketscreener.com, 13. www.investopedia.com, 14. simplywall.st, 15. www.marketbeat.com, 16. www.coxautoinc.com, 17. www.coxautoinc.com, 18. www.edmunds.com, 19. www.investopedia.com, 20. www.reuters.com, 21. www.trefis.com, 22. simplywall.st, 23. www.sec.gov, 24. www.marketbeat.com, 25. www.nasdaq.com, 26. www.reuters.com, 27. www.barrons.com, 28. investors.carvana.com, 29. investors.carvana.com, 30. investors.carvana.com, 31. www.investopedia.com, 32. www.coxautoinc.com, 33. www.edmunds.com, 34. press.spglobal.com, 35. investors.carvana.com, 36. www.trefis.com
