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Why Is Carvana (CVNA) Down 12.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Carvana (CVNA - Free Report) . Shares have lost about 12.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Carvana due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Carvana Q1 Loss Narrower Than Expected
Carvana incurred a loss of 41 cents per share for first-quarter 2024, narrower than the Zacks Consensus Estimate of a loss of 76 cents and the year-ago quarter loss of $1.51 per share, thanks to higher-than-expected sales across all segments. Revenues of $3.06 billion topped the Zacks Consensus Estimate of $2.71 billion but rose 17.5% year over year.
Key Highlights
Total gross profit amounted to $591 million, up 73.3% year over year. Total gross profit per unit (GPU) was $6,432, reflecting a surge of 49.5% year over year and beating our estimate of $5,903. SG&A expenses were $456 million, down 3.3% year over year. Carvana achieved an adjusted EBITDA of $235 million for the first quarter of 2024. Adjusted EBITDA margin in the quarter under review was a record 7.7% against negative 0.9% in the first quarter of 2023.
Segmental Performance
Retail vehicle sales totaled $2.17 billion in the quarter, rising 19% year over year and topping our estimate of $2.07 billion on the back of higher-than-expected sales volume. During the reported quarter, the number of vehicles sold to retail customers rose 15.9% to 91,878 from the prior-year period and exceeded our estimate of 84,827 units. Gross profit amounted to $283 million, implying a jump of 157.3% year over year. Gross profit per unit came in at $3,080, significantly up from $1,388 generated in the year-ago period as well as ahead of our expectations of $2,862.
In the first quarter, wholesale vehicle sales totaled $657 million, up 6.3% year over year. Sales breezed past our estimate of $398 million amid higher-than-expected unit sales. During the reported quarter, the number of vehicles sold to wholesale customers soared 25.8% to 44,155 from the prior year period and exceeded our estimate of 39,133 units. Gross profit came in at $79 million, increasing 13% from the corresponding quarter of 2023. GPU came in at $860, down 2.6% year over year. However, it outpaced our estimate of $765.
In the period under consideration, other sales and revenues rose 42.2% year over year to $229 million and beat our forecast of $142.8 million. Gross profit was $229 million, up 42.2% year over year. GPU came in at $2,492, up 22.6% year over year, and beat our estimate of $2,275.
Financial Position
Carvana had cash and cash equivalents of $252 million as of Mar 31, 2024, compared with $530 million on Dec 31, 2023. Long-term debt was $5.54 billion as of Mar 31, 2024, compared with $5.41 billion recorded on Dec 31, 2023.
Outlook
Carvana expects a sequential increase in its year-over-year growth rate of retail unit sales in the second quarter of 2024. It also anticipates a sequential increase in adjusted EBITDA in the second quarter of 2024. For the full year 2024, Carvana envisions its retail sales units and adjusted EBITDA to grow year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 93.64% due to these changes.
VGM Scores
Currently, Carvana has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Carvana has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Carvana (CVNA) Down 12.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Carvana (CVNA - Free Report) . Shares have lost about 12.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Carvana due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Carvana Q1 Loss Narrower Than Expected
Carvana incurred a loss of 41 cents per share for first-quarter 2024, narrower than the Zacks Consensus Estimate of a loss of 76 cents and the year-ago quarter loss of $1.51 per share, thanks to higher-than-expected sales across all segments. Revenues of $3.06 billion topped the Zacks Consensus Estimate of $2.71 billion but rose 17.5% year over year.
Key Highlights
Total gross profit amounted to $591 million, up 73.3% year over year. Total gross profit per unit (GPU) was $6,432, reflecting a surge of 49.5% year over year and beating our estimate of $5,903. SG&A expenses were $456 million, down 3.3% year over year. Carvana achieved an adjusted EBITDA of $235 million for the first quarter of 2024. Adjusted EBITDA margin in the quarter under review was a record 7.7% against negative 0.9% in the first quarter of 2023.
Segmental Performance
Retail vehicle sales totaled $2.17 billion in the quarter, rising 19% year over year and topping our estimate of $2.07 billion on the back of higher-than-expected sales volume. During the reported quarter, the number of vehicles sold to retail customers rose 15.9% to 91,878 from the prior-year period and exceeded our estimate of 84,827 units. Gross profit amounted to $283 million, implying a jump of 157.3% year over year. Gross profit per unit came in at $3,080, significantly up from $1,388 generated in the year-ago period as well as ahead of our expectations of $2,862.
In the first quarter, wholesale vehicle sales totaled $657 million, up 6.3% year over year. Sales breezed past our estimate of $398 million amid higher-than-expected unit sales. During the reported quarter, the number of vehicles sold to wholesale customers soared 25.8% to 44,155 from the prior year period and exceeded our estimate of 39,133 units. Gross profit came in at $79 million, increasing 13% from the corresponding quarter of 2023. GPU came in at $860, down 2.6% year over year. However, it outpaced our estimate of $765.
In the period under consideration, other sales and revenues rose 42.2% year over year to $229 million and beat our forecast of $142.8 million. Gross profit was $229 million, up 42.2% year over year. GPU came in at $2,492, up 22.6% year over year, and beat our estimate of $2,275.
Financial Position
Carvana had cash and cash equivalents of $252 million as of Mar 31, 2024, compared with $530 million on Dec 31, 2023. Long-term debt was $5.54 billion as of Mar 31, 2024, compared with $5.41 billion recorded on Dec 31, 2023.
Outlook
Carvana expects a sequential increase in its year-over-year growth rate of retail unit sales in the second quarter of 2024. It also anticipates a sequential increase in adjusted EBITDA in the second quarter of 2024. For the full year 2024, Carvana envisions its retail sales units and adjusted EBITDA to grow year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 93.64% due to these changes.
VGM Scores
Currently, Carvana has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Carvana has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.