Carvana Sales Expected to Surpass Expectations in Q3

Analyst Sharon Zackfia from William Blair predicts that Carvana, the online used car retailer, had a strong performance in the third quarter, selling approximately 80 cars. This marks a 5% increase from the previous quarter and exceeds the consensus estimate of 77,609 units. If accurate, this would also be the first sequential quarterly increase in retail units sold since Q2 of 2022.

In July, Carvana reported that it sold 76,530 retail units in Q2, a 35% decline compared to the same period last year. The company attributed this drop to reduced inventory, declining advertising efforts, and rising interest rates. Carvana expects similar results for retail units sold in Q3.

Despite these challenges, Zackfia believes that Carvana's customer-friendly, digitally enabled business model continues to bring value to the company. Carvana has consistently gained market share, even in a difficult industry environment. Zackfia rates the stock as Market Perform without assigning a specific price target.

Carvana is scheduled to release its third-quarter financial results on November 2nd after the market closes. Shares of the company have experienced a remarkable 568% surge in 2023, making it one of their best-performing years to date. This growth follows a significant decline of 98% in 2022.

Carvana's Q2 of 2023 was particularly noteworthy as it achieved its highest adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to date. Furthermore, in August, the company revised its profit outlook due to successful loan sales.