Published: December 8, 2025
Carvana Co. (NYSE: CVNA) is back in the spotlight. On December 8, 2025, the online used-car retailer’s stock surged to a new all‑time high near $455 per share, jumping almost 14% in a single session, after S&P Dow Jones Indices confirmed the company will join the S&P 500 on December 22. [1]
That milestone caps a jaw‑dropping turnaround: from flirting with bankruptcy and trading around $3–$4 in late 2022, Carvana has now rallied more than 8,000% off its lows, with its market value topping $80–90 billion and even surpassing Ford and GM. [2]
Below is a deep dive into today’s rally, the latest earnings, Wall Street forecasts and the key risks investors are debating.
Key Takeaways
- S&P 500 inclusion sparks a record high
S&P Dow Jones Indices will add Carvana to the S&P 500 on December 22, 2025, prompting a wave of buying from index‑tracking funds and helping push CVNA up nearly 14% to around $454.76 at Monday’s close. [3] - From bust to benchmark in three years
Carvana’s stock collapsed roughly 99% from a 2021 peak of about $370 to $3.72 in December 2022 amid debt and bankruptcy fears. Three years later, it’s being welcomed into the S&P 500 in what the company itself calls “arguably the biggest corporate comeback of all time.” [4] - Fundamentals have improved sharply, but leverage remains heavy
In Q3 2025, Carvana posted $5.65 billion in revenue (+55% YoY), sold 155,941 retail units (+44% YoY), generated $263 million in net income, and delivered $637 million in adjusted EBITDA with an 11.3% margin. [5]
In Q2 2025, it reported $4.84 billion in revenue and a 6.4% net margin, but still carried about $5.1 billion of debt and a debt‑to‑equity ratio near 240%. [6] - Wall Street is bullish but sees limited near‑term upside from here
Across major datasets, roughly 20–25 analysts rate CVNA a Buy/Outperform, with average 12‑month price targets in the low $400s (around $414–$420) and a range of roughly $275–$500. That’s below today’s price, implying modest downside or a “fully priced” stock after the recent run. [7] - Valuation and financing risks are front and center
Carvana now trades at about 57× forward earnings and close to 100× trailing GAAP earnings, far richer than traditional automakers, while still carrying significant debt. Short‑seller Hindenburg Research and others have questioned the sustainability of its financing model and related‑party disclosures, criticism the company has strongly rejected. [8]
Carvana Stock Today: CVNA’s S&P 500 Pop Explained
On December 8, Carvana shares:
- Opened around $434.77
- Traded between roughly $424.75 and $454.83
- Closed near $454.76, up $54.99 from the prior close of $399.77 — a gain of about 13.8% on the day
- Saw hefty volume of just under 9.6 million shares traded
The immediate catalyst: S&P Dow Jones Indices announced late Friday that Carvana will join the S&P 500 effective December 22, replacing a departing constituent. That forces index funds and ETFs that track the benchmark to buy CVNA, creating a wave of mechanical demand and often pushing prices higher in the run‑up to inclusion. [9]
According to Reuters, this move caps a 10‑day winning streak, with Carvana’s market value now around $87 billion, surpassing Ford (~$52 billion) and GM (~$71 billion). The stock trades at about 57× forward earnings, compared with single‑digit multiples for Detroit’s legacy automakers. [10]
MarketBeat notes that Carvana’s rally to a new 52‑week high follows Bank of America’s decision to raise its price target from $385 to $455, alongside other bullish targets such as JPMorgan at $490, BTIG at $450, and RBC at $460; they estimate the stock’s trailing P/E at close to 100× and put the market cap just under $95 billion in recent trading. [11]
At the same time, Carvana’s price action remains extremely volatile: StockStory points out that the shares have experienced 48 moves greater than 5% over the past year, and today’s nearly 10% morning pop on the S&P 500 news fits that pattern. [12]
From Near‑Bankruptcy to “Biggest Corporate Comeback”?
Just three years ago, the Carvana story looked very different.
- In late 2022, as used‑car demand softened and borrowing costs rose, Carvana’s highly leveraged balance sheet and cash burn led to serious bankruptcy concerns. The stock cratered from a 2021 peak near $370 to about $3.72, a roughly 99% collapse. [13]
- In early 2023, management negotiated a major debt restructuring, which Trefis and other analysts estimate deferred maturities and reduced annual interest expenses by around $430–$450 million over roughly two years — a key factor in the turnaround. [14]
By Q2 2025, AInvest notes that Carvana had delivered $4.84 billion in revenue with a 6.4% net income margin, generating about $308 million in GAAP net income and $601 million in adjusted EBITDA. Yet the company still carried about $5.1 billion of debt, with a debt‑to‑equity ratio near 239% and an interest coverage ratio of only ~2.6×, leaving “little room for error” if macro conditions worsen. [15]
Auto Remarketing, summarizing the company’s own messaging around today’s S&P 500 news, describes how Carvana’s shift from rapid expansion to efficiency and profitability in 2024–2025 — including restructuring debt and improving operations — powered what Carvana calls “the fastest‑growing, most profitable automotive retailer in history” and “arguably the biggest corporate comeback of all time.” [16]
Under the Hood: Q3 2025 Earnings and Outlook
The latest quarter is central to the current bull case.
According to Carvana’s Q3 2025 earnings release: [17]
- Retail units sold: 155,941 (+44% year‑over‑year)
- Total revenue: $5.647 billion (+55% YoY)
- Net income: $263 million (net margin 4.7%)
- Adjusted EBITDA: $637 million (margin 11.3%)
- GAAP operating income: $552 million (margin 9.8%)
- Carvana also highlighted that it crossed a $20 billion annual revenue run rate for the first time and described its profitability as “industry‑leading” in the retail auto space.
ChartMill’s post‑earnings review calls Q3 a “mixed” result: revenue beat analysts’ expectations by about 9% (roughly $5.65B versus a $5.18B consensus), but non‑GAAP EPS of $1.03 missed the Street’s $1.29 estimate by roughly 20%, which initially sent the stock down about 5–6% in after‑hours trading before the subsequent rally. [18]
For guidance, Carvana expects in Q4 2025: [19]
- Retail units sold above 150,000, and
- Full‑year 2025 adjusted EBITDA at or above the high end of its previously communicated $2.0–$2.2 billion range.
A Seeking Alpha analysis of the S&P 500 announcement highlights that Q3’s revenue growth (+55% YoY), record units and strong EBITDA conversion, along with reduced net leverage (around 1.5× trailing EBITDA), help justify the dramatic re‑rating — but also warns that much of this good news already appears embedded in the share price. [20]
What Wall Street Thinks: Ratings, Price Targets and Growth Forecasts
Analyst Ratings and Targets
Across multiple data providers, the Street is overwhelmingly positive on Carvana, but with a growing debate about valuation:
- StockAnalysis.com tracks 22 analysts covering CVNA, with a consensus rating of “Buy”. Their average 12‑month price target is $414.05, with a low of $275 and a high of $500. At today’s price around $455, that implies roughly 8–9% downside versus the average target. [21]
- GuruFocus shows a very similar picture: 24 analysts with an average target of about $419.67, again with a high near $500 and a low near $330. Their compiled “average brokerage recommendation” is roughly 2.0 on a 1–5 scale, corresponding to “Outperform”. [22]
Zooming in on recent calls:
- Bank of America (Michael McGovern): Maintains Buy, raises target from $385 to $455, citing continued operational momentum and S&P 500 inclusion as catalysts. [23]
- UBS: Initiated coverage on December 1 with a Buy and a target around $450, highlighting Carvana’s differentiated online platform and customer experience. [24]
- Wedbush: Upgraded from Neutral to Outperform and lifted the target from $380 to $400, arguing that recent pullbacks were overdone and that Carvana could surpass CarMax in used‑unit volume by Q4 2026. [25]
- Needham: Reiterated Strong Buy with a more aggressive $500 target. [26]
- Barclays: Initiated with Overweight and a $390 target. [27]
- JPMorgan, BTIG, RBC: Recent bullish notes include targets in the $450–$490 range, according to MarketBeat. [28]
In short, most analysts still like the story, but the average target now lags the stock, which is often a sign that either:
- Targets may get revised upward again if the fundamentals continue to surprise, or
- The stock has run ahead of consensus expectations and could be vulnerable to disappointment.
Revenue and EPS Forecasts
StockAnalysis aggregates Street estimates and shows remarkably aggressive growth forecasts through 2026: [29]
- Revenue 2024: $13.67B
- Revenue 2025 (estimate):$20.31B (+48.5% YoY)
- Revenue 2026 (estimate):$25.82B (+27.1% YoY)
- EPS 2024: $1.59
- EPS 2025 (estimate):$5.29 (+~233%)
- EPS 2026 (estimate):$7.20 (+~36%)
These numbers reflect expectations that Carvana’s scale and vertically integrated operations will keep driving margin expansion even as volumes grow.
Financial Modeling Prep highlights that some bullish analysts model Carvana scaling to 3 million annual retail units by 2033, potentially overtaking CarMax’s volumes, with Wedbush forecasting Q4 2025 revenue around $5.2B and full‑year 2025 revenue near $19.9B. [30]
At the same time, GuruFocus’ proprietary “GF Value” model pegs Carvana’s fair value closer to $265 in one year, implying substantial downside versus its recent prices. That underscores how sensitive valuation conclusions are to different modelling assumptions and risk premia. [31]
Bulls vs. Bears: The Core Debate Around CVNA
The Bull Case
Pro‑Carvana analysts and investors tend to emphasize:
- Structural advantage in online used‑car retail
Carvana’s fully online, vertically integrated model — from sourcing and reconditioning to vending‑machine pick‑up and home delivery — can, in theory, support higher asset turns and lower per‑unit costs than traditional lots. [32] - Huge addressable market with low current share
Trefis estimates the U.S. used‑car market sees around 40 million transactions annually, and Carvana’s share remains roughly 1%. That leaves a long runway for growth if it can keep gaining share. [33] - Improving profitability at scale
Recent quarters have shown sustained GAAP profits and strong adjusted EBITDA margins (over 11% in Q3), with Q2 and Q3 both delivering several hundred million dollars of net income. [34] - Balance sheet progress
Debt restructuring significantly reduced near‑term interest bills and pushed out maturities, while net debt relative to trailing EBITDA has shrunk as earnings improved. [35] - S&P 500 inclusion as a “validation” moment
Being added to the index brings forced buying by passive funds, more liquidity, and a psychological stamp of approval that can expand the shareholder base and potentially lower the cost of capital. [36]
From this lens, bulls argue Carvana deserves a premium multiple as a high‑growth, tech‑enabled retailer, not a traditional auto dealer.
The Bear (or Cautious) Case
Skeptics — including some neutral/hold‑rated analysts and short sellers — push back on several fronts:
- Still‑heavy leverage and thin coverage
Even after restructuring, Carvana’s ~$5.1B in debt, ~239% debt‑to‑equity ratio, and 2.6× interest coverage leave the company exposed if rates stay high or used‑car demand weakens. [37] - Interest holiday expiring in late 2025
Trefis warns that the interest savings from Carvana’s restructuring agreement are set to roll off in Fall 2025, potentially causing interest expense to rise and compressing net margins again if operating performance doesn’t keep improving. [38] - Aggressive valuation
With forward and trailing P/E multiples far above market averages and automotive peers — even after accounting for higher growth — some analysts argue CVNA’s price now assumes near‑flawless execution and sustained dominance in a cyclical, competitive industry. [39] - Financing model & credit‑cycle risk
Hindenburg Research’s detailed report argues that Carvana’s profits rely heavily on selling auto loans to partners like Ally Financial and an allegedly undisclosed related‑party buyer, raising questions about underwriting quality and transparency. They describe the business as “more of a subprime finance business than a car dealership” and highlight concentration risk and redacted contract details. [40]
Carvana has publicly denied these allegations as “misleading and inaccurate,” but the debate has contributed to bouts of volatility and regulatory scrutiny. [41] - Sentiment‑driven, not just fundamentals‑driven
Both Trefis and Seeking Alpha commentators characterize CVNA as a sentiment‑ and momentum‑driven stock, vulnerable to sharp swings if macro conditions, credit markets or used‑vehicle pricing turn against it, or if growth slows from today’s blistering pace. [42]
In other words, even some analysts who like the business and execution rate the stock a Hold at current levels, seeing an attractive company but a demanding valuation. [43]
What S&P 500 Inclusion Really Changes — and What It Doesn’t
What it changes:
- Forced demand: Index and closet‑index funds that track the S&P 500 will now have to own CVNA, creating structural buying pressure in the near term. [44]
- Liquidity and visibility: Inclusion typically boosts daily trading volumes and improves research coverage, making it easier and cheaper for large institutions to build positions. [45]
- Cost of capital: A larger, more diversified shareholder base and proven access to capital markets can support future debt refinancing or equity issuance on better terms — important for a company that still carries leverage. [46]
What it doesn’t change:
- The cyclicality of the used‑car business
- The credit risk associated with auto loans and securitizations
- The eventual step‑up in interest expense as restructuring benefits fade
- The valuation, beyond what investors are willing to pay for the shares
As a Seeking Alpha commentary points out, S&P 500 inclusion often supports “elevated valuations even if fundamentals alone would not justify current prices,” but does not eliminate execution risk or macro exposure. [47]
What to Watch Next if You’re Following Carvana Stock
For readers tracking CVNA — whether or not you own it — a few key signposts over the next 12–18 months:
- Q4 2025 results and 2026 guidance
- Do retail units stay above 150,000 in Q4 as guided?
- Does full‑year adjusted EBITDA meet or beat the high end of the $2.0–$2.2B range? [48]
- Debt and interest expense trajectory post‑2025
- How does Carvana handle the expiration of its interest‑relief arrangements?
- Can it refinance remaining debt at reasonable rates if markets tighten? [49]
- Loan performance and financing partners
- Trends in delinquencies and recoveries on Carvana‑originated loans, particularly in a weaker credit environment.
- Any changes in relationships with Ally Financial or new whole‑loan buyers, and whether disclosure becomes more detailed after criticism. [50]
- Margin sustainability
- Whether net and EBITDA margins stay in the mid‑single‑digit/high‑single‑digit range or higher as volumes grow, or whether competition and cost pressures eat into profitability. [51]
- Regulatory or legal developments
- Any follow‑up action or investigations stemming from short‑seller allegations or loan‑sale disclosures could alter the risk profile. [52]
- Relative performance versus CarMax and peers
- If Carvana truly overtakes CarMax in quarterly used‑unit volume by 2026, as some analysts forecast, it would strengthen the “structural winner” narrative; if not, investors may reassess the long‑term thesis. [53]
Bottom Line: A High‑Beta Winner at a High Bar
Carvana’s inclusion in the S&P 500 and its powerful rebound from the brink of collapse make for a compelling headline story. The company has clearly improved its operations and profitability, and the latest numbers, plus Street forecasts, suggest strong growth into 2026 if management executes.
At the same time, today’s price already bakes in a lot of optimism:
- The stock trades at premium multiples versus peers and historical norms. [54]
- Consensus price targets are below the current share price, not above it. [55]
- Leverage, financing structure, and macro‑sensitive demand for used cars remain real risks. [56]
For investors, CVNA now sits firmly in “high‑beta, high‑expectation” territory: the upside from here likely depends on Carvana continuing to outperform already‑lofty forecasts, while any stumble in earnings, credit quality, or macro conditions could trigger sharp pullbacks.
This article is informational only and does not constitute investment advice or a recommendation to buy or sell any security. If you’re considering an investment in Carvana stock, it’s important to evaluate your own risk tolerance, time horizon, and financial situation, and to consult a qualified financial adviser before making decisions.
References
1. www.reuters.com, 2. www.reuters.com, 3. www.reuters.com, 4. www.autoremarketing.com, 5. investors.carvana.com, 6. www.ainvest.com, 7. stockanalysis.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.reuters.com, 11. www.marketbeat.com, 12. stockstory.org, 13. www.autoremarketing.com, 14. www.trefis.com, 15. www.ainvest.com, 16. www.autoremarketing.com, 17. investors.carvana.com, 18. www.chartmill.com, 19. investors.carvana.com, 20. seekingalpha.com, 21. stockanalysis.com, 22. www.gurufocus.com, 23. www.gurufocus.com, 24. www.gurufocus.com, 25. site.financialmodelingprep.com, 26. stockanalysis.com, 27. stockanalysis.com, 28. www.marketbeat.com, 29. stockanalysis.com, 30. site.financialmodelingprep.com, 31. www.gurufocus.com, 32. investors.carvana.com, 33. www.trefis.com, 34. investors.carvana.com, 35. www.trefis.com, 36. www.reuters.com, 37. www.ainvest.com, 38. www.trefis.com, 39. www.reuters.com, 40. hindenburgresearch.com, 41. www.trefis.com, 42. www.trefis.com, 43. seekingalpha.com, 44. www.reuters.com, 45. seekingalpha.com, 46. www.reuters.com, 47. seekingalpha.com, 48. investors.carvana.com, 49. www.trefis.com, 50. hindenburgresearch.com, 51. investors.carvana.com, 52. hindenburgresearch.com, 53. site.financialmodelingprep.com, 54. www.reuters.com, 55. stockanalysis.com, 56. www.ainvest.com
