What Happened?
Shares of online used car dealer Carvana (NYSE: CVNA) jumped 5.7% in the afternoon session after positive analyst sentiment highlighted a potential upside for the stock. The optimistic outlook was supported by a consensus "Buy" rating from 19 analysts covering the company. On average, these analysts set a price target of $411.53, which represented a potential 35.38% increase from its trading price. This general belief among analysts suggested the stock was likely to perform better than the broader market over the following twelve months.
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What Is The Market Telling Us
Carvana’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 3.7% on the news that the company's recent earnings report sparked fears about its future performance, despite strong results. The stock pulled back due to guidance that pointed to a potential sequential decline in retail unit sales. Management's forecast for the fourth quarter was for at least 150,000 retail units, which was down from 155,941 in the third quarter. Broader concerns about rising auto loan delinquencies and narrowing profit margins also weighed on investor sentiment. Following the report, Citi lowered its price target on the company's shares to $445 from $490, reinforcing the negative market reaction to the outlook.
Carvana is up 61.9% since the beginning of the year, but at $323.13 per share, it is still trading 18.3% below its 52-week high of $395.41 from September 2025. Investors who bought $1,000 worth of Carvana’s shares 5 years ago would now be looking at an investment worth $1,679.
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