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Growth or Bubble? Carvana Stock Rising Rapidly!

Matt MonacoAvatar
Written by Matt Monaco Reviewed by Jack Kellogg Fact-checked by Tim Sykes
Updated 3/20/2025, 11:38 am ET 3/20/2025, 11:38 am ET | 6 min 6 min read
Growth or Bubble? Carvana Stock Rising Rapidly! Thumbnail

Carvana Co. ‘s stock is climbing amid bullish sentiment following a high-profile collaboration with a major tech company and promising earnings guidance. On Thursday, Carvana Co.’s stocks have been trading up by 8.06 percent.

The Story Unfolds: Breaking Financial Records

  • For the fiscal year 2024, Carvana celebrated a resounding success across its financial reports—a significant leap in revenue, net income, and Adjusted EBITDA left stakeholders and analysts pleasantly surprised.

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Live Update At 11:37:33 EST: On Thursday, March 20, 2025 Carvana Co. stock [NYSE: CVNA] is trending up by 8.06%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • Following these stellar results, financial powerhouse Citizens JMP boosted Carvana’s price goal from $320 to $340, acknowledging an astonishing 50% growth in retail units year-over-year, defying common expectations.

  • Not just revenue, Carvana reported impressive earnings per share of $1.59, easily eclipsing analysts’ predictions of $1.48, marking exceptional profitability as a public automotive retailer.

Carvana’s Stellar Earnings Performance and Financial Metrics

As millionaire penny stock trader and teacher Tim Sykes, says, “You must adapt to the market; the market will not adapt to you.” Traders must be agile and responsive to the ever-changing dynamics of the market. It is crucial for them to continuously update their strategies to stay ahead, as remaining stagnant could lead to missed opportunities or potential losses. Adapting quickly to shifts in market conditions can make the difference between success and failure in trading.

Carvana’s latest financial results are nothing short of impressive. The company reported revenue of $13.67 billion for FY24, comfortably beating analyst expectations of $13.46 billion. Notably, the earnings per share (EPS) reached $1.59, higher than the predicted $1.48. This secured Carvana the title of the “most profitable public automotive retailer” by Adjusted EBITDA margin.

A key ratio analysis reveals some important insights. The company’s Gross Margin stands at 21%, while the EBIT Margin clocks in at 3%. This reflects a considerable improvement and highlights Carvana’s ability to generate profit on its core services. However, the Pre-tax Profit Margin is less optimistic at -4%. Such mixed signals might cause cautious optimism among investors.

What particularly stands out is the valuation measure with a Price-to-Earnings ratio of around 110.75. It suggests an expensive valuation, possibly indicating investor expectations of future growth. The asset turnover ratio is at 1.8, suggesting efficient use of assets to generate sales.

In terms of financial strength, Carvana’s debt-to-equity ratio of 4.8 signals a leveraged structure that could raise eyebrows. Despite a solid current ratio of 3.6, denoting Carvana’s ability to cover its short-term liabilities, potential risks arise given the substantial long-term debt.

More Breaking News

The company’s free cash flow was $60 million, demonstrating its capacity to manage day-to-day operations and finance its growth, pivotal for any company in the current economic landscape. However, with significant debt still looming, it’s a mixed bag in terms of financial fortitude.

Rally or Risk: Impact of Current Market News

Carvana’s record-breaking financial announcements peppered with an industry-leading retail growth narrative command consumer attention. However, bustling developments constantly redefine market dynamics, creating investment opportunities and risks alike.

Citizens JMP’s enhanced price target to $340 directly addressed the market’s renewed optimism over Carvana’s growth potential. A particular focus has been placed on retail efficiency and furthering distribution channels, heightening the company’s intrinsic value amongst stakeholders.

Simultaneous to this proclamation, RBC Capital adjusted their price target from $280 to $320, further solidifying confidence in Carvana’s trajectory. Like Citizens JMP, RBC Capital cites burgeoning Gross Profit per Unit (GPU) and expected EBITDA improvements as critical drivers of this upward revision.

Meanwhile, other analysts like Citi and BofA have also lifted price targets, pinnacling their projections upon sustaining the growth narrative championed by Carvana. Nonetheless, amidst every golden opportunity lies potential risk, not a single spokesperson can overlook an unexpected $913 million ATM offering that added to concerns regarding stock value dilution.

Conclusions: Charting the Path Ahead

Carvana has tantalizing potential and bold ambitions, with its decisive actions lighting the trail for an exhilarating journey moving forward. Prolific growth and inspired stock price targets signal traders’ embrace of Carvana’s robustness in the automotive domain. However, fundamental challenges and elevated evaluations call for prudence when pulling trades close. As millionaire penny stock trader and teacher Tim Sykes says, “There is always another play around the corner; don’t chase just because you feel FOMO.”

Thus, when the financial tides are tempestuous and market forces unyielding, the age-old answer lies in staying informed and adaptable. While Carvana’s forecast might promise delight and dividends, one must always enquire—Is this stock a path to astounding growth, or a bubble ready to burst? Whatever the case may be, time and vigilant analysis must tell.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

Dive deeper into the world of trading with Timothy Sykes, renowned for his expertise in penny stocks. Explore his top picks and discover the strategies that have propelled him to success with these articles:

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Matt Monaco

Mentor and Trainer at StocksToTrade.com, Lead Mentor at Small Cap Rockets and To The Moon Report
He is a diligent trader and teacher in his To The Moon Report blogs and Small Cap Rockets strategy webinars. He shows up every day, and expects his students to as well. Matt is fond of trading sketchy, volatile OTC stocks with profit potential. His favorite patterns are panic dip buys and breakouts.
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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”