December 10, 2025 – Carvana Co. (NYSE: CVNA)
Carvana stock is back in the spotlight after a jaw‑dropping turnaround: from a near‑penny‑stock in late 2022 to a newly minted member of the S&P 500 with a market value that now rivals and even surpasses Detroit’s auto giants.
As of Wednesday, Carvana shares are trading in the mid‑$450s, near an all‑time high, giving the online used‑car retailer a market capitalization of roughly $100 billion and a trailing price‑to‑earnings ratio above 100. [1]
Bulls see a digital‑first disruptor with explosive growth and a scalable logistics platform. Bears see a richly priced momentum story heavily exposed to subprime auto credit and late‑cycle consumer risk. Here’s how the latest news, forecasts and analyses stack up as of December 10, 2025.
Key Takeaways
- Stock near record highs, valuation stretched: CVNA is trading around the mid‑$450s, with a 52‑week range of about $148–$464 and a market cap near $101 billion. The stock trades at roughly 105x trailing earnings and about 67x forward earnings, with a 12‑month consensus price target around $415—implying high single‑ to low double‑digit downside from current levels. [2]
- S&P 500 inclusion is the big December catalyst: S&P Dow Jones Indices will add Carvana to the S&P 500 before the market opens on December 22, 2025, alongside CRH and Comfort Systems USA. Shares jumped 8–12% on the announcement and are now up roughly 100–125% in 2025 and more than 8,000–12,000% from their December 2022 lows. [3]
- Fundamentals: record growth, real profits: In Q3 2025 Carvana generated $5.65 billion in revenue (+55% YoY), 155,941 retail units sold (+44% YoY), net income of $263 million (4.7% margin), and $637 million in adjusted EBITDA (11%+ margin). Management expects Q4 retail units “above 150,000” and full‑year 2025 adjusted EBITDA “at or above the high end” of its $2.0–$2.2 billion range. [4]
- Wall Street is mostly bullish—but cautious on price: Bank of America, UBS, Wedbush and Oppenheimer all rate the stock Buy/Outperform with price targets between $400 and $455, citing Carvana’s digital edge, share‑gain trajectory and improving balance sheet. But consensus targets (~$415–$430) now sit below the current price, and independent DCF work from firms like Simply Wall St pegs “fair value” closer to $350–$360 per share. [5]
- Risks: valuation, credit quality and technical froth: Benzinga notes Carvana now ranks in the bottom 10th percentile of U.S. stocks on value metrics, even as it sits in the top tier for momentum, and flags an overbought RSI near 79. Short‑seller Hindenburg Research has called the turnaround a “mirage,” pointing to heavy exposure to subprime and deep‑subprime auto loans. Macro worries about delinquencies, high APRs and used‑car price normalization are front and center in several recent bearish pieces. [6]
Where Carvana Stock Trades Today
According to StockAnalysis and other real‑time tracking sites, Carvana shares recently traded around $460–$461, up about 1% on the day, after closing near $456 in the previous session. [7]
Key snapshot metrics (as of December 10, 2025):
- Share price: ~$460
- Market cap: ~$101 billion
- TTM revenue: ~$18.3 billion
- TTM net income: ~$629 million
- TTM EPS: ~$4.40
- P/E (TTM): ~105x
- Forward P/E: ~67x
- 52‑week range:$148.25 – $464.00
- Beta: ~3.5 (very volatile) [8]
The consensus from 20+ covering analysts is “Buy”, but the average 12‑month price target of ~$415 sits roughly 10% below where the stock currently trades, reflecting the fact that the share price has run far ahead of prior models. [9]
From Near‑Bankruptcy to S&P 500: The Turnaround in Numbers
Carvana’s current moment is almost unrecognizable compared with late 2022:
- In December 2022, the stock bottomed around $3–4 per share, after losing about 99% of its value from 2021 highs amid concerns the company might run out of cash. [10]
- Since then, shares have surged more than 8,000–12,000%, depending on the reference point, with recent coverage from Forbes and MarketBeat highlighting one of the wildest comebacks of the cycle. [11]
Operationally, Q3 2025 showed why bulls think this is more than just a meme‑style squeeze:
- Revenue: $5.65B (+55% YoY)
- Retail units sold: 155,941 (+44% YoY)
- Operating margin: 9.8% (up ~60 bps YoY)
- Net margin: 4.7% (up ~70 bps YoY)
- Adjusted EBITDA: $637M (+48% YoY), margin above 11%
- Run‑rate revenue: Now above $20B annualized for the first time. [12]
On the balance‑sheet side, management has:
- Retired roughly $1.2 billion of corporate debt over 2024–25
- Boosted cash to more than $2.1 billion
- Brought net debt / TTM adjusted EBITDA down to about 1.5x, versus highly levered levels in 2022. [13]
That combination—real profitability, accelerating scale and de‑risked leverage—is central to the bullish thesis.
Latest Catalyst: S&P 500 Inclusion and Forced Buying
The most immediate driver of December’s move is index inclusion.
S&P Dow Jones Indices announced on December 5 that Carvana, CRH and Comfort Systems USA will be added to the S&P 500 ahead of the open on December 22, 2025, as part of the benchmark’s quarterly rebalancing. [14]
Key implications and reactions:
- Premarket surge: Reuters reports that CVNA jumped about 8.6% in premarket trading on December 8 after the inclusion news, extending a rally that has already nearly doubled the stock in 2025 and driven gains of more than 8,000% since the 2022 trough. [15]
- Index demand: AInvest, citing Simply Wall St and other data, estimates that index funds may need to buy roughly 16 million CVNA shares ahead of the effective date, helping fuel a double‑digit premarket pop on December 9. [16]
- Valuation step‑change: Reuters and AInvest both note that Carvana’s market value is now in the neighborhood of $87–100B, putting it above Ford (~$52B) and GM (~$71B) despite much smaller unit volumes—one reason critics see the stock as priced for perfection. [17]
The S&P 500 nod caps what MarketBeat calls a more than 10,000% surge from the lows and cements Carvana as one of the most extreme winners of the post‑pandemic market. [18]
Not everyone is applauding: a widely circulated Yahoo Finance piece notes that some retail traders on social platforms have labeled the addition “one of the greatest market manipulations” and are actively betting against the rally. [19]
What Wall Street Is Saying Now: Price Targets and Ratings
Despite the rich valuation, sell‑side sentiment remains skewed bullish, though with growing nuance.
Big‑Name Bulls
- Bank of America (Buy, $455 PT):
BofA analyst Michael McGovern reiterated a Buy rating and raised his price objective from $385 to $455, explicitly calling S&P 500 inclusion the “most significant catalyst” and arguing Carvana could overtake CarMax in quarterly unit sales by 2026. He also highlights recent S&P Global credit upgrades on Carvana’s debt and a structurally more resilient balance sheet. [20] - UBS (Buy, $450 PT):
UBS initiated coverage on December 1 with a Buy rating and a $450 target, describing Carvana as a “true disruptor” with a best‑in‑class e‑commerce platform. Analyst Joseph Spak estimates Carvana holds about 1.5% of total used‑vehicle sales (3% of the retail segment) today, with potential to reach roughly 4% market share by 2030 and 8% over the next decade as online car buying grows from just ~2% of used‑car sales today. [21] - Wedbush (Outperform, $400 PT):
Wedbush upgraded Carvana from Neutral to Outperform on November 24, raising its target from $380 to $400 and dubbing the company the “new used car king.” The firm expects Carvana to overtake CarMax in used‑vehicle volumes as early as Q4 2026, citing operational efficiencies, stronger credit performance and momentum in older, cheaper vehicles and non‑prime financing. [22] - Oppenheimer (Outperform, $450 PT):
Back in July, Oppenheimer upgraded CVNA and set a $450 target, calling Carvana a “unique, digitally‑driven disruptor” and arguing investors still underestimate its long‑term growth and profit potential despite the massive rally since early 2023. [23]
Consensus Picture
Across major aggregators:
- Average rating: “Buy” / “Moderate Buy”
- Average 12‑month target: roughly $415–$430
- Target range: low around $275, high around $500
- Implied move: most models now imply flat to modest downside from today’s price, as the stock has run ahead of earlier forecasts. [24]
That disconnect—bullish ratings but sub‑current price targets—is one of the clearest signs that analysts are playing catch‑up to the rally.
The Bull Case: Digital Moat, Scale and Structural Tailwinds
Recent bullish research and commentary highlight several recurring themes.
1. A Scalable Digital Platform in a Huge Market
Carvana operates a national e‑commerce platform for buying and selling used cars, backed by its own logistics and reconditioning network and the ADESA auction real‑estate footprint. [25]
Supportive points from bulls:
- Tiny but growing share: At ~1.5% share of the total used‑vehicle market, Carvana’s slice is still small in a roughly $600 billion U.S. used‑car industry, leaving significant room to grow without needing the whole pie. [26]
- Online migration: Only about 2% of used‑car sales are fully online today. UBS and others see this shifting steadily higher as buyers become comfortable conducting large transactions on the web—an area where Carvana’s user experience is viewed as “best in class.” [27]
2. Operational Leverage and Same‑Day Delivery
Carvana has leaned hard into logistics and technology:
- Q3 2025 saw record units and revenue with double‑digit EBITDA margins, even as marketing spend ticked higher. [28]
- Management and third‑party analysts point to same‑ and next‑day delivery as a “secret weapon,” with some markets like Phoenix reportedly seeing ~40% of orders delivered same or next day, versus around 10% nationally. [29]
Bulls argue this logistics network and software stack will be difficult for rivals to replicate at scale.
3. Balance‑Sheet Repair and Index Validation
After flirting with distress in 2022, Carvana has:
- Reduced gross debt, improved cash balances, and pushed leverage down to more comfortable levels. [30]
- Secured credit‑rating upgrades from S&P Global on both its secured and unsecured debt, according to recent BofA commentary. [31]
S&P 500 inclusion is viewed by many bulls as validation that Carvana has moved from survival mode to a durable, profitable business—making it investable for a much broader universe of institutions.
4. Long‑Term Volume and Margin Ambitions
Analysts frequently reference management’s long‑term vision of selling millions of vehicles per year at healthy mid‑teens EBITDA margins. Wedbush, citing company commentary, projects as many as 3 million annual vehicle sales by 2033, which would represent a multi‑fold increase from current volumes. [32]
If Carvana even partially delivers on those ambitions while maintaining double‑digit margins, the company’s current earnings could grow fast enough to “grow into” today’s lofty valuation—at least in the bullish scenario.
The Bear Case: Rich Valuation, Credit Risk and Late‑Cycle Jitters
Not everyone is convinced the story ends happily.
1. Valuation and Momentum Excess
Multiple pieces published over the last 48 hours argue that the stock has outrun its fundamentals:
- Benzinga’s valuation screen now places Carvana in the bottom 10th percentile of the market on value metrics, with a composite “value score” below 10 on a 0–100 scale—meaning it screens as more expensive than 90%+ of U.S. stocks relative to earnings, sales and assets. [33]
- The same note highlights a 24% gain in the past month, a 2025 gain around 100%, and a relative strength index (RSI) of ~78.6, firmly in overbought territory. [34]
Independent valuation work cited by AInvest and Simply Wall St suggests a DCF‑based fair value near $354 per share, implying substantial downside if growth or margins disappoint. [35]
2. Subprime Exposure and the Hindenburg Short Thesis
A MarketBeat/Investing.com analysis and a widely discussed report by Hindenburg Research raise sharp questions about Carvana’s lending model:
- Carvana reportedly approves 99% of applicants, with a minimum income requirement of just $10,000/year, well below the federal poverty line for a single‑person household. [36]
- Hindenburg’s work—based on months of documents and interviews—claims that over 44% of Carvana’s originated loans are non‑prime, with over 80% of those in deep subprime, and that roughly a quarter of gross profit comes from selling these loans into asset‑backed markets. [37]
- With subprime auto delinquencies at or near record highs, the short thesis is that Carvana’s apparent solvency and profitability might not survive a full credit cycle if losses spike. [38]
Carvana has defended its practices and continues to post solid credit performance metrics, but regulators and investors are clearly watching.
3. Margin and Cash‑Flow Pressures
The recent Motley Fool/Nasdaq analysis, “What to Watch With CVNA Stock in 2026,” flags two subtler concerns:
- Operating cash flow over the first nine months of 2025 fell to about $606M from $858M a year earlier, even as headline earnings improved—largely due to working‑capital shifts and loan‑sale economics. [39]
- Adjusted EBITDA margin slipped from 11.7% to 11.3% year‑on‑year in Q3, despite more than $300 per‑vehicle savings in selling costs, suggesting new cost headwinds (including marketing and financing) are emerging. [40]
Authors there caution that 2026 will be an important test of whether the business model genuinely scales or whether it was uniquely boosted by the unusual conditions of the past few years (tight new‑car supply, low rates, robust consumer demand).
4. Macro and Technical Overhangs
Additional worries cited in recent coverage include:
- Macro sensitivity: Used‑car prices have come down from pandemic highs, while consumer credit quality is deteriorating at the margin. Lower‑income buyers are the most strained segment—exactly where Carvana has been pushing deeper via older, cheaper cars and non‑prime financing. [41]
- Event‑driven froth: AInvest notes that S&P 500 inclusion has created a tug‑of‑war between index‑fund inflows and skeptics who see the rally as driven more by forced buying and Fed‑cut optimism than fundamentals. Insider selling by senior executives in recent weeks is also drawing scrutiny. [42]
For value‑oriented or risk‑averse investors, those factors make CVNA look like a highly speculative play at current levels.
What to Watch in 2026: Scenarios and Key Metrics
Across bullish and bearish research, a few common checkpoints emerge for the next 12–24 months.
1. Unit Growth vs. CarMax and New Entrants
- Wedbush and BofA both expect Carvana to surpass CarMax in quarterly used‑car unit sales by 2026 if current trends hold. [43]
- UBS models market share rising to ~4% by 2030 and potentially 8% longer term, from about 1.5% now. [44]
Investors will be watching whether quarterly unit volumes continue to grow at a market‑beating pace without sacrificing margins.
2. Margins, Cash Flow and Debt
Key lines on the dashboard:
- Adjusted EBITDA margin (currently ~11%+)
- Operating cash flow vs. accounting earnings
- Further debt pay‑down and refinancing progress
If Carvana can sustain double‑digit EBITDA margins and translate them into robust free cash flow while continuing to reduce leverage, the bullish thesis gains credibility. If margins compress and cash flow stagnates, valuation concerns will intensify.
3. Credit Quality and Loan Performance
Given the scrutiny of Carvana’s financing arm:
- Watch delinquency and loss rates in its securitizations
- Track any regulatory actions or guidance around subprime auto lending
- Monitor external credit‑market sentiment; several recent auto‑lending bankruptcies (such as Tricolor Holdings) have already spooked investors. [45]
A benign or improving credit environment would be a tailwind. A deep credit downturn would be especially painful for a company whose profits are tightly tied to loan sales.
4. Competition and Moat
Beyond traditional dealers and CarMax, Amazon Autos is emerging as a wildcard after its 2024 launch and partnerships with Hyundai, Hertz and Ford. [46]
Carvana’s ability to defend and expand its “best‑in‑class” digital experience, maintain same‑day delivery advantages, and keep customer acquisition costs in check will help determine whether it becomes the dominant online used‑car marketplace or one of several strong players.
Bottom Line: High‑Beta Winner or Late‑Stage Story?
As of December 10, 2025, the Carvana story looks like this:
- Objectively impressive fundamentals: explosive revenue and unit growth, real profitability, visible operating leverage and a drastically improved balance sheet.
- A powerful narrative: S&P 500 inclusion, multiple high‑profile upgrades (BofA, UBS, Wedbush, Oppenheimer) and TV personalities like Jim Cramer calling it “one of his favourite companies” heading into 2026. [47]
- But also clear yellow flags: a triple‑digit P/E, heavy reliance on subprime lending, technical overbought readings, insider selling and a widening gap between price and conservative valuation models.
In practical terms:
- For aggressive, growth‑oriented investors, Carvana may still look attractive as a high‑beta way to bet on the digitization of auto retail—especially if you believe management can keep scaling volumes and margins while managing credit risk.
- For more conservative or value‑focused investors, the combination of rich multiples, macro sensitivity and complex financing exposure may make CVNA a watch‑list name rather than a core holding until the price better reflects long‑term risks.
Either way, the next year—Carvana’s first as an S&P 500 constituent—should go a long way toward answering the market’s biggest question: is this a durable digital champion, or one of the most spectacular late‑cycle rallies of the post‑pandemic era?
References
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