{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "CVNA",
  "name": "Carvana Co.",
  "url": "https://frontierpicks.com/dossiers/CVNA/",
  "json_url": "https://frontierpicks.com/dossiers/CVNA.json",
  "status": "WATCHLIST",
  "current_conviction": "MEDIUM",
  "archetype": {
    "code": "a7",
    "n": 7
  },
  "current_thesis": "Carvana is taking share in a flat used-car market, with third-quarter retail units up 39% and more units guided for the fourth quarter. The February 2027 report shows whether volume growth outruns falling profit per car.",
  "invalidation_trigger": "A daily close below $65, under the 50-day moving average, which would show the post-earnings gain failing; or fourth-quarter retail units below the third quarter's 217,385, breaking the guide for a sequential increase.",
  "catalyst_date": null,
  "portfolio": null,
  "pick": null,
  "themes": [
    "consumer-discretionary-rotation",
    "fintech-consumer-credit"
  ],
  "tags": [],
  "sources": [],
  "notes": [
    "Carvana completed a 5-for-1 forward stock split, with shares trading on a split-adjusted basis from May 7, 2026; earlier prices and targets near $400–$600 are pre-split.",
    "Carvana has Class A and Class B shares; the Garcia family holds a controlling share of voting power through the Class B stock.",
    "Carvana sells most of the auto loans it originates, so gains on loan sales, and therefore reported profit, depend on credit-market conditions."
  ],
  "source_links": [
    {
      "title": "CARVANA CO. - Form 8-K - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001690820/000169082026000066/ex99_1q32026.htm",
      "date": "2026-10-28"
    },
    {
      "title": "Carvana Announces Record Third Quarter 2026 Results",
      "url": "https://www.nasdaq.com/press-release/carvana-announces-record-third-quarter-2026-results-2026-10-28",
      "date": "2026-10-28"
    },
    {
      "title": "Carvana Soared 27% in the Week Ending Nov. 2 After Its First 200,000-Car Quarter: “The Moat Is Widening”",
      "url": "https://www.tikr.com/blog/carvana-soared-27-in-the-week-ending-nov-2-after-its-first-200000-car-quarter-the-moat-is-widening",
      "date": null
    },
    {
      "title": "MarketBeat",
      "url": "https://www.marketbeat.com/instant-alerts/analyst-carvana-nyse-cvna-price-target-raised-to-8200-2026-10-30/",
      "date": "2026-10-30"
    },
    {
      "title": "MarketBeat",
      "url": "https://www.marketbeat.com/instant-alerts/analyst-carvana-nyse-cvna-price-target-raised-to-8500-2026-10-30/",
      "date": "2026-10-30"
    },
    {
      "title": "Carvana Board of Directors Approves 5 for 1 Forward Stock Split",
      "url": "https://press.carvana.com/carvana-board-of-directors-approves-5-for-1-forward-stock-split/",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "Third-quarter 2026 retail units were a record 217,385, up 39% year over year; revenue was $8.04 billion, up 42%.",
      "source": "Carvana Q3 2026 shareholder letter (8-K Exhibit 99.1)",
      "as_of": "2026-10-28"
    },
    {
      "claim": "Third-quarter 2026 net income was $483 million (6.0% margin); adjusted EBITDA was $800 million, a 10.0% margin against 11.3% a year earlier.",
      "source": "Carvana Q3 2026 shareholder letter (8-K Exhibit 99.1)",
      "as_of": "2026-10-28"
    },
    {
      "claim": "GAAP total gross profit per retail unit fell $365 to $6,997; management estimated fuel prices and rising benchmark rates cut unit economics by about $200 per unit.",
      "source": "Carvana Q3 2026 shareholder letter (8-K Exhibit 99.1)",
      "as_of": "2026-10-28"
    },
    {
      "claim": "Management guided to higher fourth-quarter retail units than the third quarter and full-year 2026 adjusted EBITDA in the higher end of $2.7–$3.0 billion.",
      "source": "Carvana Q3 2026 shareholder letter (8-K Exhibit 99.1)",
      "as_of": "2026-10-28"
    },
    {
      "claim": "Barclays raised its target to $82 (Overweight) and Citizens to $85; MarketBeat consensus target was $82.09.",
      "source": "MarketBeat analyst alerts, 2026-10-30",
      "as_of": "2026-10-30"
    },
    {
      "claim": "Chief Product Officer Daniel Gill sold 253,639 shares at $71.46 in the open market.",
      "source": "SEC Form 4 filed 2026-11-03",
      "as_of": "2026-11-03"
    },
    {
      "claim": "Director Ira Platt exercised options at $3.00 and sold 29,640 shares at an average $75.75.",
      "source": "SEC Form 4 filed 2026-11-05",
      "as_of": "2026-11-04"
    }
  ],
  "view_changes": [],
  "frame": null,
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Consumer Cyclical",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-09-30",
      "figures": {
        "revenue": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-28",
              "value_musd": 8040,
              "yoy_pct": 42.4
            },
            {
              "end": "2026-06-30",
              "filed": "2026-07-29",
              "value_musd": 7376,
              "yoy_pct": 52.4
            },
            {
              "end": "2026-03-31",
              "filed": "2026-04-29",
              "value_musd": 6432,
              "yoy_pct": 52
            },
            {
              "end": "2025-12-31",
              "filed": "2026-02-18",
              "value_musd": 5603,
              "yoy_pct": 58
            },
            {
              "end": "2025-09-30",
              "filed": "2026-10-28",
              "value_musd": 5647,
              "yoy_pct": 54.5
            },
            {
              "end": "2025-06-30",
              "filed": "2026-07-29",
              "value_musd": 4840,
              "yoy_pct": 41.9
            }
          ]
        },
        "gross_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-28",
              "pct": 18.9
            },
            {
              "end": "2026-06-30",
              "filed": "2026-07-29",
              "pct": 18.8
            },
            {
              "end": "2026-03-31",
              "filed": "2026-04-29",
              "pct": 19.8
            },
            {
              "end": "2025-12-31",
              "filed": "2026-02-18",
              "pct": 18.8
            },
            {
              "end": "2025-09-30",
              "filed": "2026-10-28",
              "pct": 20.3
            },
            {
              "end": "2025-06-30",
              "filed": "2026-07-29",
              "pct": 22
            }
          ]
        },
        "operating_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-28",
              "pct": 8.9
            },
            {
              "end": "2026-06-30",
              "filed": "2026-07-29",
              "pct": 9.2
            },
            {
              "end": "2026-03-31",
              "filed": "2026-04-29",
              "pct": 9
            },
            {
              "end": "2025-12-31",
              "filed": "2026-02-18",
              "pct": 7.6
            },
            {
              "end": "2025-09-30",
              "filed": "2026-10-28",
              "pct": 9.8
            },
            {
              "end": "2025-06-30",
              "filed": "2026-07-29",
              "pct": 10.6
            }
          ]
        },
        "pretax_income": {
          "status": "not reported"
        },
        "net_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "four_quarters_end": "2026-09-30",
          "value_musd": 289,
          "four_quarters_musd": 1706
        },
        "operating_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "first_end": "2025-12-31",
          "value_musd": 1330
        },
        "capital_spending": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "first_end": "2025-12-31",
          "value_musd": 217
        },
        "free_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "first_end": "2025-12-31",
          "value_musd": 1113
        },
        "diluted_share_change": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "base_end": "2025-09-30",
          "pct": 1.2
        },
        "cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 3049
        },
        "debt": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 5176,
          "composition": "non-current long-term debt plus current maturities"
        },
        "net_cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": -2127
        },
        "deferred_revenue": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 68,
          "yoy_pct": 38.8
        },
        "backlog": {
          "status": "not reported"
        },
        "receivables": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 320
        },
        "inventory": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 3456
        },
        "equity": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-28",
          "value_musd": 4352
        },
        "market_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "value_musd": 53547.3
        },
        "enterprise_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "value_musd": 55674.3
        },
        "ev_sales": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "multiple": 2
        },
        "ev_ebit": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "multiple": 23.2
        },
        "pe": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "multiple": 31.4
        },
        "pb": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "multiple": 12.3
        },
        "fcf_yield": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-09-30",
          "basis_filed": "2026-10-28",
          "pct": 2.1
        }
      }
    },
    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-11-13",
      "short_pct_of_outstanding": 9.05,
      "days_to_cover": 7.6,
      "change_pct": -0.7
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-14",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-17",
          "bought_usd": 0,
          "sold_usd": 45182371,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        },
        {
          "days": 365,
          "status": "ok",
          "from": "2025-11-15",
          "bought_usd": 1547188.17,
          "sold_usd": 281813342.86,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        }
      ]
    }
  },
  "body_markdown": "## Current Thesis\nCarvana is taking share in a flat used-car market. Third-quarter retail units rose 39% while the industry was roughly flat, and management guided to more units in the fourth quarter. That gives the shares a modestly better-than-even chance of beating the S&P 500 over the next three months. The open question is profit per car. It fell in the third quarter as Carvana cut loan rates and benchmark interest rates rose. The fourth-quarter report, expected in February 2027, shows whether volume growth still outruns that squeeze.\n\nThe rating is Medium. Volume, guidance and most analyst targets back the case. Falling per-unit profit, rising rates and stress at auto lenders weaken it. Since the 2026-10-28 report the market has paid for the volume and marked down the margin. The close of $73.87 on 2026-11-11 is 24.1% below the 52-week high of $97.38 set on 2026-01-23. TIKR data put the shares at about 32 times forward earnings on 2026-10-30, against a 46-times average over the prior year.\n\n## Bull Case\n- **Record volume in a flat market.** Carvana sold 217,385 retail units in the third quarter of 2026, up 39% from a year earlier, and revenue rose 42% to $8.04 billion (company shareholder letter, 2026-10-28).\n- **Profit is growing in dollars.** Third-quarter net income was $483 million, up $220 million, a 6.0% margin against 4.7% a year earlier. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding certain items) hit a record $800 million (shareholder letter, 2026-10-28).\n- **Guidance points to the top of the range.** Management expects fourth-quarter retail units to rise from the third quarter and full-year 2026 adjusted EBITDA in the higher end of its $2.7–$3.0 billion range, as long as conditions stay stable (shareholder letter, 2026-10-28).\n- **Analysts raised targets after the report.** UBS raised its target to $84 (Buy) and Deutsche Bank set $85 on 2026-10-29. On 2026-10-30, Barclays raised its target to $82 (Overweight), Citizens raised its to $85, and Morgan Stanley named Carvana a top pick. MarketBeat's consensus target was $82.09 after the report.\n\n## Bear Case\n- **Profit per car is shrinking.** Total gross profit per retail unit fell $365 to $6,997, and the adjusted EBITDA margin fell to 10.0% from 11.3% (shareholder letter, 2026-10-28). TIKR puts adjusted EBITDA per retail unit at about $3,680, down from $4,085.\n- **Rates and fuel cost about $200 a car.** Management said elevated fuel prices and rapidly rising benchmark interest rates cut unit economics by about $200 per unit in the third quarter. Carvana also lowered customer loan rates by more than 100 basis points relative to benchmarks (shareholder letter, 2026-10-28).\n- **Auto-credit stress is spreading.** Credit Acceptance fell 20% on 2026-10-30 after cutting expected loan collections by $291.2 million (TIKR, 2026-11-02). Carvana sells most of the loans it originates, so weaker credit markets reach its loan-sale gains directly.\n- **Not every analyst raised.** BNP Paribas cut its target to $67 (Neutral) on 2026-10-29, DA Davidson holds a Neutral with a $67 target, and Needham kept its Buy but cut its target to $100 from $120 (MarketBeat, 2026-10-30).\n- **Insiders sold into the rally.** Chief Product Officer Daniel Gill sold 253,639 shares at $71.46 on 2026-11-03. Director Ira Platt exercised options at $3.00 and sold 30,000 shares at an average $71.74 on 2026-11-03 and 29,640 shares at an average $75.75 on 2026-11-04 (SEC Form 4 filings).\n\n## Setup & Price Structure\nThe shares jumped after the report: TIKR measured a 27% rise from $56.61 on 2026-10-26 to $72 on 2026-11-02. They have since traded in a narrow range. The high close in that range was $77.56 on 2026-11-04 and the low was $72.08 on 2026-11-05. The last close was $73.87 on 2026-11-11.\n\nThat close sits above the 50-day moving average of $65.87 and the 200-day moving average of $68.42, both as of 2026-11-11. The 3-month change is 0.2%, measured against $73.70 on 2026-08-13, so the post-earnings jump only made up an earlier decline. The 52-week closing low is $56.26 on 2026-03-20. The 52-week intraday high is $97.38 on 2026-01-23.\n\nA hold above the 200-day average would show the market accepting the guidance. A drop back toward the 50-day average would show the margin worry winning.\n\n## Catalyst Calendar\n\n- **~2026-12-09 (est.):** Federal Reserve December policy decision. Carvana tied third-quarter margin pressure to rapidly rising benchmark rates; the rate path sets its loan funding costs and loan-sale gains.\n- **~2027-02-18 (est.):** Fourth-quarter and full-year 2026 report. Shows whether retail units rose from the third quarter's 217,385 as guided, and whether full-year adjusted EBITDA landed in the higher end of $2.7–$3.0 billion.\n\n## What Would Change Our Mind\n\nA daily close below $65, under the 50-day moving average, which would show the post-earnings gain failing; or fourth-quarter retail units below the third quarter's 217,385, breaking the guide for a sequential increase.\n\nThe risks this note tracks, each with what would confirm it:\n\n- Rising benchmark rates keep squeezing loan-sale gains and gross profit per unit. Confirmed by: Fourth-quarter total gross profit per retail unit falling further below the third quarter's $6,997.\n- Auto-credit stress cuts demand for Carvana's loan sales or raises their cost. Confirmed by: More subprime auto lenders cutting collection forecasts after Credit Acceptance's $291.2 million cut on 2026-10-30, or Carvana reporting lower loan-sale premiums.\n- Volume growth slows as Carvana stops cutting loan rates to protect margin. Confirmed by: Fourth-quarter retail unit growth falling well below the third quarter's 39% year-over-year pace.\n- Full-year profit misses the raised guide. Confirmed by: Full-year 2026 adjusted EBITDA below the middle of the $2.7–$3.0 billion range.\n\n## Correlation Notes\nCarvana trades with consumer credit and interest rates as much as with retail. Its loan-sale gains depend on funding costs and buyer demand for auto loans, so moves in benchmark yields and news from subprime auto lenders such as Credit Acceptance (down 20% on 2026-10-30) reach the shares directly. CarMax is the closest listed comparison. It reported a $111 drop in gross profit per retail vehicle even as comparable-store used-vehicle sales rose 13% (TIKR, 2026-11-02), a sign the margin pressure runs across the industry. Carvana has also traded as a high-beta growth stock: it rose in the 2026-10-29 session, when small caps rallied on strong GDP data.",
  "first_seen": "2026-11-12",
  "last_analyzed": "2026-11-12T18:07:45+00:00",
  "last_synthesized": "2026-11-12",
  "date_modified": "2026-11-12",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}