Well, I don’t know who lit a fire under Carvana, but dayuuum someone should probably check if they’ve got some friggin ‘nitrous oxide in the tank. In short, the online used-car retailer just obliterated expectations for the third quarter. And honestly, I’m about as shocked as pretty much everyone to see this happen. Why? Well because just a year ago, Carvana was teetering on the edge of bankruptcy. Now? They’re riding a near 400% stock surge like they are Teflon Don in the election betting markets. 

(Source: Giphy) 

For starters, Carvana didn’t just beat Wall Street’s Q3 estimates; they showed up with a sledgehammer. Earnings per share? Analysts were expecting 25 cents, and Carvana came in at a poppin’ 64 cents. That’s more than double the estimate. On the revenue stance, Wall Street thought $3.45 billion was a safe bet - however, Carvana hit them with $3.65 billion. If this were a game of poker, Carvana just pushed all their chips to the center and walked away with the pot. A.k.a. Thuggin’.

(Source: Sherwood) 

Meaning, after this absolute clinic of how to beat earnings, investors are now frothing at the mouth. Carvana’s stock shot up 20% in after-hours trading, hitting $249.30. Again, for a company that was on the verge of collapse last year, this is like watching a phoenix rise from the ashes—except instead of wings, it has a fleet of pre-owned sedans LOL. 

(Source: Barrons) 

Additionally, when it comes to Wall Street's most important metric - the company also raised its earnings guidance for next year, saying their adjusted EBITDA will be “significantly above” the high end of their previous target of $1 billion to $1.2 billion. Do you hear that? That’s the sound of Netflix’s greed glands pulsing for a docuseries on Carvana’s comeback. 

For more context on the raised outlook, Carvana reported $339 million in adjusted EBITDA last year, and they just posted $429 million for Q3 alone. So yeah, 2024 is shaping up to be more of the same—if not better. They’re predicting a nice little bump in vehicle sales too. In Q3, Carvana moved 108,651 cars, up 34% year-over-year. For Q4, they’re expecting even more growth. Convenience shopping at its finest, folks. 

(Source: Giphy) 

Now the big question here is, what’s the reason for the turnaround? Well as it turns out, slashing costs and restructuring operations was exactly what Carvana needed. They’ve been cutting selling, general, and administrative expenses like a budget shopper at a used-car lot. In fact, they’re now saving $1,030 per vehicle compared to last year while also adding… gasp… AI tools. That’s a record $3,497 in retail gross profit per car. Talk about getting more mileage out of your operations.

(Source: PYMTS) 

What’s more is that the result has been nothing short of spectacular. Fast forward to today, and Carvana’s stock has given a classic middle finger to gravity, climbing almost 400% this year. On Wednesday, shares hit a new 52-week high of $213.98 before closing just under $208. And after their earnings beat? Boom—up another 20% (sitting at $240/share at the time of this writing). 

Now with that said, sure, there are still risks hanging out in the rearview mirror—like potential economic downturns or shifts in used-car demand—but for now, Carvana is definitely snappin’ necks and cashin’ checks. And the good thing? They don’t seem to be slowing down anytime soon.

In the meantime, do what you will with this information and as always stay safe and stay frosty, friends! Until next time… 

PS: Before you jump on the Carvana bandwagon, you might want to see how we’re already scoring big at Stocks.News. Just this Wednesday, we locked in a 64% winner—in under five hours. Want to know how we did it? Check out the details on becoming a Stocks.News Premium member (don’t miss out on the next exciting trade).

Stocks.News holds positions in Netflix as mentioned in the article.