New York, February 20, 2026, 14:28 ET — Regular session
- Carvana bounced back roughly 2% Friday, recovering a bit after two days of steep declines following its quarterly results.
- The company pointed to steeper vehicle reconditioning expenses and rising retail depreciation, both expected to weigh on results in the near term.
- Investors want specifics on cost controls and guidance when Stephens hosts its call Feb. 26.
Carvana Co. shares picked up around 2% to $339.76 Friday afternoon, clawing back some ground after a sharp drop earlier in the week that followed earnings. The stock’s been bouncing between $318 and $345 during the session.
The rebound is key here—Carvana’s been valued as if smooth execution is a given. For high-growth names like this, any hiccup on costs gets hit hard by the market. Afterward? Days of debate about whether that reaction went too far.
Carvana’s latest quarter proved demand hasn’t disappeared, but getting cars retail-ready isn’t getting any cheaper. Reconditioning—that’s the inspection, repairs, and detailing before a car gets listed—remains a key line item, one that can shift profits per vehicle up or down.
Carvana reported in its shareholder letter that retail units sold in the fourth quarter jumped 43% to 163,522. Revenue followed, up 58% to $5.603 billion. The company noted a dip in “GPU,” or gross profit per unit, and said adjusted EBITDA margins dropped to 9.1%.
The company flagged “elevated reconditioning costs” for the first quarter once more, though it’s still looking for a sequential bump in retail GPU in Q1—provided conditions don’t change. Reconditioning expenses came in above projections, particularly at sites where management is newer. Higher retail depreciation rates also weighed on results, it said.
Carvana shares slid roughly 15% in after-hours trading Wednesday after the company fell short of Wall Street’s profit expectations for the fourth quarter, according to Reuters. On the earnings call, CFO Mark Jenkins flagged that cost pressures would likely continue into Q1. He also addressed fresh claims from short seller Gotham City Research, stating, “We don’t sell loans to related parties.” Reuters
Shares dropped roughly 8% Thursday, with at least four brokerages—among them J.P. Morgan and RBC Capital Markets—cutting price targets after the company reported results, according to Reuters. Stephens analyst Jeff Lick saw the decline as a possible buying point, but flagged that even “modest disappointments” can spark sharp swings in high-valuation names. Carvana, for its part, had about 14.84 million shares sold short, representing nearly 10.7% of its free float as of Feb. 17, per Ortex data cited by Reuters. Reuters
The broader market was solidly higher Friday, with the SPDR S&P 500 ETF gaining roughly 0.6%. CarMax slipped around 0.5%, while AutoNation managed a 0.4% uptick in afternoon trading.
But there’s an easy bear scenario here: if reconditioning and depreciation costs stay elevated through the spring, profit margins per vehicle could get squeezed, putting new pressure on the stock. Carvana’s latest annual filing lists $461 million left to use in its at-the-market share sale program as of Dec. 31, 2025—that’s a dilution risk if the company chooses to sell.
Investors are eyeing a Stephens-organized follow-up call with Carvana’s capital markets and investor relations group set for Feb. 26. That’s when institutions get a shot to dig into specifics—cost controls, reconditioning performance, and how management sees the first quarter shaking out.
For now, used-car prices stay in focus for traders, who are also watching how short interest and options positioning might crank up CVNA’s daily moves.
