- Carvana (CVNA) stock dipped more than 15% in early trading Thursday, despite a strong Q4. The company reported earnings of $0.56 per share, beating estimates by $0.25, and revenues up 46.3% to $3.55 billion, exceeding the $3.34 billion consensus.
- The used-car dealer reported a record 2024 with $13.67 billion in revenue, 416,000 retail units sold (up 33%), and a $1.37 billion adjusted EBITDA, yet faced a stock drop possibly due to prior Hindenburg Research criticisms of its financial practices.
- Carvana forecasts significant growth in retail units and adjusted EBITDA for 2025, maintaining optimism after a 360% year-over-year stock rise, though the market’s reaction suggests lingering investor caution amidst its profitability milestone.
Carvana (CVNA) shares took a sharp 15.31% dive to $238.66 in early Thursday trading, despite the online car dealer delivering a robust Q4 performance with earnings of $0.56 per share – beating consensus estimates by $0.25 – and revenues soaring 46.3% year-over-year to $3.55 billion, topping the expected $3.34 billion. This unexpected tumble comes even as the company celebrated a record-breaking 2024, achieving $13.67 billion in annual revenue and a landmark adjusted EBITDA of $1.37 billion with a 10.1% margin, positioning it as the most profitable public automotive retailer in U.S. history according to CEO Ernie Garcia. The company’s full-year retail unit sales reached 416,000, a 33% jump from the prior year, with Q4 alone seeing 114,379 units sold against an estimate of 108,339.
Despite the positive financials, the market’s reaction seems tinged with skepticism, possibly influenced by lingering echoes of controversy from early January when Hindenburg Research labeled Carvana’s success an “accounting grift for the ages,” criticizing its subprime loan exposure and lax underwriting standards—claims from a now-defunct short seller that once shook the EV sector. Carvana’s stock had enjoyed a meteoric rise, up nearly 360% year-over-year and 43% in 2025 before this earnings report, suggesting that the current drop might reflect profit-taking or heightened scrutiny rather than a rejection of its underlying performance. Looking ahead, the $58.5 billion market cap Carvana projects significant growth in retail units sold and adjusted EBITDA for 2025, expecting sequential gains in Q1 if market conditions hold steady, reinforcing Garcia’s narrative of industry-leading expansion.
The broader context highlights a company that narrowly avoided bankruptcy in December 2022, when its stock collapsed 98% to a valuation of about $400 million. Through aggressive cost-cutting and operational efficiencies, it has since returned to profitability, yet it remains a polarizing figure in the investment community. The contrast between its stellar financial turnaround and the sharp stock decline highlights the volatile nature of investor sentiment in the used-car market, where macroeconomic factors like interest rates and consumer spending power can overshadow even the strongest earnings beats. Carvana’s ability to sustain its profitability and growth trajectory in 2025 will likely depend on maintaining consumer trust and managing its loan portfolio, areas where past criticisms could resurface if economic winds shift. For now, the market’s immediate response appears to be a pause in an otherwise remarkable ascent, leaving investors to weigh the promise of future gains against the shadows of past controversies.
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