Carvana (NYSE:CVNA) Shares Gap Down Following Weak Earnings

Shares of Carvana Co. (NYSE:CVNA) gapped down before the market opened on Thursday following a weaker than expected earnings announcement. The stock had previously closed at $353.95, but opened at $312.10. Carvana shares last traded at $322.1440, with a volume of 3,352,584 shares trading hands.

The company reported $1.03 EPS for the quarter, missing analysts’ consensus estimates of $1.29 by ($0.26). Carvana had a net margin of 3.44% and a return on equity of 35.84%. The business had revenue of $5.65 billion for the quarter, compared to the consensus estimate of $5.04 billion. During the same quarter last year, the firm posted $0.64 EPS. The business’s quarterly revenue was up 54.5% on a year-over-year basis.

Wall Street Analysts Forecast Growth

CVNA has been the topic of a number of research reports. Wells Fargo & Company boosted their target price on shares of Carvana from $390.00 to $425.00 and gave the company an “overweight” rating in a report on Thursday, July 31st. Piper Sandler upped their price target on shares of Carvana from $340.00 to $440.00 and gave the stock an “overweight” rating in a research note on Thursday, July 31st. Jefferies Financial Group reiterated a “buy” rating on shares of Carvana in a research note on Thursday. Wall Street Zen cut shares of Carvana from a “buy” rating to a “hold” rating in a research note on Sunday, October 19th. Finally, Zacks Research upgraded shares of Carvana from a “hold” rating to a “strong-buy” rating in a research note on Monday, October 6th. One investment analyst has rated the stock with a Strong Buy rating, fourteen have given a Buy rating and six have issued a Hold rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average target price of $418.00.

Insider Activity

In other news, VP Stephen R. Palmer sold 1,000 shares of the company’s stock in a transaction dated Wednesday, October 1st. The shares were sold at an average price of $390.14, for a total transaction of $390,140.00. Following the completion of the sale, the vice president owned 43,513 shares of the company’s stock, valued at $16,976,161.82. This represents a 2.25% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, CEO Ernest C. Garcia III sold 2,880 shares of the stock in a transaction that occurred on Thursday, October 9th. The stock was sold at an average price of $355.19, for a total transaction of $1,022,947.20. Following the completion of the sale, the chief executive officer directly owned 350,000 shares of the company’s stock, valued at $124,316,500. This represents a 0.82% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 939,855 shares of company stock worth $338,492,060. Company insiders own 17.12% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Parkside Financial Bank & Trust boosted its stake in Carvana by 13.5% in the 3rd quarter. Parkside Financial Bank & Trust now owns 303 shares of the company’s stock worth $114,000 after purchasing an additional 36 shares during the period. iA Global Asset Management Inc. bought a new position in Carvana in the 3rd quarter worth approximately $1,096,000. Strs Ohio boosted its stake in Carvana by 89.9% in the 3rd quarter. Strs Ohio now owns 37,756 shares of the company’s stock worth $14,243,000 after purchasing an additional 17,878 shares during the period. Rakuten Investment Management Inc. bought a new position in Carvana in the 3rd quarter worth approximately $3,307,000. Finally, Huntleigh Advisors Inc. boosted its stake in Carvana by 0.9% in the 3rd quarter. Huntleigh Advisors Inc. now owns 4,264 shares of the company’s stock worth $1,609,000 after purchasing an additional 36 shares during the period. 56.71% of the stock is currently owned by institutional investors.

Carvana Stock Down 13.8%

The company has a current ratio of 4.00, a quick ratio of 2.58 and a debt-to-equity ratio of 2.51. The firm has a market capitalization of $65.69 billion, a P/E ratio of 69.69, a P/E/G ratio of 1.13 and a beta of 3.55. The company has a 50 day simple moving average of $363.58 and a two-hundred day simple moving average of $329.49.

About Carvana

Carvana Co, together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. Its platform allows customers to research and identify a vehicle; inspect it using company's 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up from their desktop or mobile devices.