Carvana (NYSE:CVNA) Shares Up 4% - What's Behind the Surge?

Carvana Co. (NYSE:CVNA) saw its shares rise by 4% during trading on Friday, reaching a high of $192.98 before closing at $192.81. The volume of shares traded was approximately 2,131,848, a significant drop of 45% compared to its average volume of 3,841,689 shares. The previous close was recorded at $185.42.

Analysts Predict Positive Growth

Several analysts have recently updated their outlook on Carvana's shares. Piper Sandler upgraded the stock from a "neutral" to an "overweight" rating and set a price target of $225.00 in a report released on Thursday. Likewise, Robert W. Baird increased their price target from $200.00 to $250.00 while maintaining a "neutral" rating. Citigroup also raised its target, pushing it from $277.00 to $320.00 and assigned a "buy" rating on February 21. Additionally, JPMorgan Chase lifted its target from $350.00 to $365.00 with an "overweight" rating. Furthermore, William Blair reaffirmed an "outperform" rating. Currently, seven equity analysts have rated the stock as a hold while eleven have given it a buy rating. According to MarketBeat, the consensus rating for Carvana is a "Moderate Buy," with an average price target of $262.71.

Evaluating Carvana's Stock Performance

Carvana's financial health is indicated by its current ratio of 3.64, a quick ratio of 2.12, and a debt-to-equity ratio of 3.82. The stock's 50-day moving average stands at $227.61, while its 200-day moving average is at $214.18. The company's market capitalization is reported at $41.29 billion, with a price-to-earnings ratio of 123.36 and a beta of 3.56. On February 19, Carvana posted its quarterly earnings, revealing an earnings per share (EPS) of $0.56, exceeding analyst expectations of $0.29. The company reported a net margin of 1.54% and a return on equity of 36.59%, with revenues of $3.55 billion for the quarter against anticipated figures of $3.32 billion. Analysts predict an EPS of 2.85 for the current year.

Insider Activity at Carvana

In recent developments, COO Benjamin E. Huston sold 50,000 shares of Carvana stock on March 14 at an average price of $178.49, totaling $8,924,500.00 from the sale. After this transaction, he retains ownership of 196,278 shares valued at approximately $35,033,660.22, which is a 20.30% decrease in his stake. This transaction was filed with the SEC. Additionally, CFO Mark W. Jenkins sold 28,422 shares at an average price of $288.85, resulting in a total of $8,209,694.70, leading to a11.44% decrease in his holdings. In the past three months, insiders sold a cumulative total of 119,784 shares worth $27,524,344, with insider ownership accounting for 17.12% of the stock.

Institutional Investors Take Interest

Recent changes in institutional investor positions show significant engagement with Carvana's stock. CIBC Asset Management increased its holdings by 3.5% in Q3, now owning 3,366 shares valued at $586,000. Empowered Funds LLC entered a new position valued at approximately $494,000 during the same period. Natixis Advisors LLC lifted its stake by 2.6%, now holding 80,885 shares worth $14,083,000 after adding 2,054 shares. The Swiss National Bank also increased its stake by 6.9%, owning 207,900 shares valued at $36,197,000. First Horizon Advisors Inc. significantly boosted its holdings by 363.0% in Q3, owning 250 shares valued at $44,000 after adding 196 shares. Overall, institutional investors hold 56.71% of Carvana's stock.

Understanding Carvana's Business Model

Carvana Co, along with its subsidiaries, runs an e-commerce platform dedicated to buying and selling used cars in the United States. Its platform allows customers to research vehicles, utilize panoramic vehicle imaging technology for inspections, secure financing and warranty coverage, purchase vehicles, and arrange for delivery or pick-up—all from their desktop or mobile devices.

Investment Considerations for Carvana

If you are thinking about investing in Carvana, it's important to do thorough research. MarketBeat has identified top-rated research analysts who actively track and recommend stocks for investors. While Carvana currently holds a "Moderate Buy" rating among analysts, it's worth exploring other investment opportunities that may also be available.

Carvana, Stocks, Investing