Carvana Had Its Best Quarter Ever

Let’s start with what actually happened. On April 29th, Carvana (NYSE: CVNA) reported its best quarter in company history — by almost every measure that matters. Revenue of $6.43 billion. Net income of $405 million. Adjusted EBITDA of $672 million. Retail units sold: 187,393, up 40% year over year, marking the sixth consecutive quarter of 40%-or-greater unit growth. The company also executed a 5-for-1 stock split effective May 7, with shares now trading on a split-adjusted basis near $68.

And yet the stock is down roughly 16% year to date.

That’s the tension worth sitting with. Not the earnings beat — the disconnect between what the business is doing operationally and what the market is willing to pay for it right now. The 52-week range runs from $54.46 to $97.38 on a split-adjusted basis. The stock is closer to the low end of that range than the high. That’s not a small gap for a company posting record results every single quarter.

Here’s where it gets interesting. The beat itself was more significant than the headline suggests. EPS came in at $1.69 versus a consensus estimate of $1.49 — a 13.4% beat. Revenue of $6.43 billion topped the $6.08 billion expectation by a wide margin, up 52% year over year. Gross profit rose to $1.3 billion. GAAP operating income hit $581 million, a new company record and equal to 86% of adjusted EBITDA — which, frankly, is a tighter GAAP-to-non-GAAP ratio than most people give Carvana credit for.

Net income of $405 million, up from $373 million a year earlier. Cash and equivalents at $2.4 billion. Total assets of $13.8 billion against $5.0 billion in total debt. Net debt to trailing twelve-month adjusted EBITDA: 1.1x. Two years ago, the balance sheet was the reason most serious analysts wouldn’t touch the stock. Now it’s actually starting to look defensible.

Q2 guidance calls for sequential increases in both retail units and adjusted EBITDA, which would set all-time company records on both metrics. Management also reiterated its long-term target of 3 million units annually at a 13.5% adjusted EBITDA margin by 2030 to 2035. Whether you believe that or not is a separate conversation — but the trajectory over the last six quarters makes it harder to dismiss than it was 18 months ago.

What the Numbers Don’t Settle

Adjusted EBITDA margin contracted year over year — 10.4% in Q1 2026 versus 11.5% in Q1 2025. That’s not a catastrophe, and management attributed part of the shift to revenue recognition treatment on retail gross profit. But margin compression during a period of record volume growth is the kind of thing that makes bears feel validated, even when the absolute dollar figures are hitting records. Non-GAAP retail gross profit per unit actually declined by $58, driven by higher non-vehicle costs and lower shipping fees. SG&A per unit improved by $170 — so the operating leverage story is intact, just not uniform across every line.

Slight tangent, but it matters: Carvana’s auto finance business is increasingly central to understanding the P&L. In 2025, the company reported $1.2 billion in total gain from finance receivables sold to financing partners and through securitization — up from $755 million in 2024 and $434 million in 2023. In Q1 2026 alone, Carvana sold $1.6 billion of receivables under the Ally forward flow arrangement, $1.0 billion via securitizations, and $1.4 billion through fixed pool sales. The loan-sale economics are a meaningful contributor to gross profit, and they’re also one of the harder line items for outside analysts to stress-test. That opacity is part of why the valuation debate stays as polarized as it does.

The used car market itself is doing something interesting right now. New vehicle affordability constraints — partly driven by tariff uncertainty pushing new-car prices higher — have nudged more buyers toward used. Carvana’s CEO Ernie Garcia acknowledged that car prices are high and that aggregate transaction volumes remain stable, but the directional tailwind for used-car demand is real. Carvana is sitting in a structurally advantaged position whether or not that was the original plan.

What the Analyst Community Actually Thinks

Twenty-four analysts cover CVNA. The consensus is Buy, with an average split-adjusted price target around $87, implying meaningful upside from current levels near $68. Barclays maintained its Overweight rating with a split-adjusted target of $93. Baird raised its target to $88 from $80. RBC Capital issued a Buy with a $92 target. William Blair reiterated Buy, citing strong growth trajectory and brand advantages post-split. DA Davidson sits at Neutral with a $67 target — roughly in line with where the stock is trading now, which tells you something about how wide the spread of opinion is.

The bull case, in simplified form: EBITDA margins recover toward 12–13% as reconditioning scale advantages compound, Q2 sets all-time records, and the market eventually assigns a multiple that reflects a profitable, scaled, vertically integrated used-car platform. The bear case: macro softness hits used-car demand, loan-sale economics deteriorate under credit stress, margin pressure continues, and a P/E of 34–42x on a cyclical business starts to look like a liability rather than a growth premium.

Both sides have been making versions of this argument for two years. Neither has been entirely wrong.

The Overhang Nobody’s Talking About Enough

Insider activity is worth flagging. Over the last six months, insiders have made 248 open-market sales and zero purchases. Chief Product Officer Daniel Gill sold 120,000 shares for an estimated $54 million. COO Benjamin Huston sold 120,000 shares for an estimated $49 million. Lone Pine Capital reduced its CVNA position by 80.3% in Q1 2026 — roughly 7.1 million shares, or an estimated $449 million in value. Multiple Rule 10b5-1 trading plans allow for additional insider sales beginning in late May 2026.

None of that is disqualifying on its own. Insiders sell for all kinds of reasons, and some of this is likely pre-planned diversification tied to the stock’s extraordinary run — from a split-adjusted all-time low near $0.74 in December 2022 to nearly $97 at its 52-week peak. That’s a 10,000%-plus move. You’d sell some too. But the pattern is notable in the context of a stock that’s already struggling to hold ground despite record fundamentals.

Options Picture

Options flow in CVNA has been described as mixed in recent sessions, with the stock showing elevated volatility relative to the broader market. The 5-for-1 split adjusted all existing contracts — strike prices divided by five, contract multipliers adjusted accordingly — so anyone comparing pre- and post-split options data needs to account for that. The split-adjusted 52-week range of $54.46 to $97.38 gives you a rough frame for how wide the expected distribution of outcomes is. High-beta, high-IV names like this one tend to make their moves fast and in both directions.

For traders expecting continued upside into the June 4 investor day at the Elyria, Ohio reconditioning center, a defined-risk structure — long call spreads targeting a move back toward the $80–$85 range — keeps downside contained while participating in a potential positive catalyst. For traders skeptical of the valuation at current levels, a defined-risk put spread below the 52-week low offers asymmetric exposure to a deterioration in either macro conditions or loan-sale economics. Neutral positioning — short straddles or iron condors sized around the expected move — makes sense if you believe the range-bound behavior of the last several weeks continues through the near-term.

If you believe the 2026 EPS estimate decline of roughly 17% year over year is already priced in, the bull case has a mathematical foundation. If you believe the market is still working through the post-split positioning and insider-sale overhang, patience before committing to a directional position is the more defensible read.

Here’s where I’m at on Carvana as a business: it has earned the right to be taken seriously. The six-quarter streak of 40%-plus unit growth, real net income, a net debt-to-EBITDA ratio that’s come down to 1.1x, 34 reconditioning locations — this is not the same company that nearly went bankrupt in late 2022. The operational execution has been legitimately impressive, and management has delivered on enough forward guidance to make the next set of targets at least worth tracking.

The stock is a different question. A P/E of 34–42x on a cyclical used-car retailer with a $5 billion debt load, heavy insider selling, and EBITDA margins that compressed year over year despite record volume is a lot to pay. The 2025 consensus EPS estimate is tracking lower. Loan-sale economics are harder to model than retail GPU. The forward sales multiple of roughly 2.5x is dramatically higher than CarMax at 0.23x or any traditional auto retailer peer.

The June 4 investor day in Ohio is the next moment of clarity. Management will either reinforce confidence in the margin recovery path — which is what the bulls need to see — or introduce new complexity that the market will spend the next quarter trying to price. Worth watching closely.

Key Levels and Dates to Track

• Current price (split-adjusted): ~$68 | 52-week range: $54.46 – $97.38
• Q1 2026 EPS: $1.69 vs. $1.49 expected | Revenue: $6.43B vs. $6.08B expected
• Adjusted EBITDA: $672M | Margin: 10.4% (vs. 11.5% a year ago)
• Net debt / TTM EBITDA: 1.1x | Cash: $2.4B | Total debt: $5.0B
• Analyst consensus: Buy | Avg. split-adjusted PT: ~$87 | Range: $67 – $93+
• June 4: Investor/analyst day at Elyria, Ohio reconditioning center
• Q2 guidance: Sequential records in both retail units and adjusted EBITDA
• Watch: Insider sale activity, loan-sale economics, EBITDA margin trajectory

The business is compounding. The stock is range-bound. Whether those two things converge — and when — is still an open question.