Carvana (CVNA) Stock Forecast & Price Target

Carvana is anticipated to achieve retail vehicle unit sales of 748,000 for fiscal year 2026, an increase from prior estimates, bolstered by growing consumer perceptions of better pricing compared to traditional dealers. The company forecasts fourth-quarter revenue of $5.2 billion, representing a year-over-year growth of 46.4%, alongside a 36.3% increase in used unit sales. Additionally, recent momentum suggests that Carvana is likely to exceed CarMax's quarterly used unit volumes six months earlier than previously expected, indicating a strengthening competitive position in the market.

Carvana has experienced a decline in total used vehicle unit sales, falling by 2% year-over-year in the third quarter, which is a significant deceleration from the previous quarter's growth of 8%. The company's stock is facing multiple compression, aligning more closely with traditional dealerships, as it currently trades at a multiple of 22x projected 2027 earnings per share, which is below its two-year average and shows a tighter premium relative to CarMax. Furthermore, Carvana's shares have decreased by approximately 13% over the past month, impacted by lackluster performance from its closest competitor, CarMax, and growing concerns in the credit markets.