Carvana Earnings Tonight After 9000 Percent Rally Hits the Brakes

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•  29 Oct 2025
 

•   CVNA  
   
  -2.89%

When a stock climbs 9,000% in three years, you're either watching a historic comeback story or setting yourself up for a brutal lesson in gravity. Tonight, after the bell, $CVNA reports Q3 earnings, and the tension couldn't be thicker.

Analysts expect adjusted earnings of around $1.32 per share, more than doubling last year figure, alongside a 40% revenue jump to roughly $5.1 billion. The stock has already surged 78% year-to-date, riding optimism about digital car buying and the dramatic turnaround since its 2022 near-death experience.

But beneath the surface, cracks are forming. Consumer spending among lower-income households is weakening, auto loan delinquencies are climbing, and key players in the financing ecosystem like TriColor Holdings and First Brands have collapsed. These aren't minor footnotes they're structural warnings about the environment Carvana operates in.

The credit exposure is the most underappreciated risk. Carvana doesn't just sell cars; it finances a significant chunk of them. When default rates spike, especially among younger buyers getting squeezed right now, Carvana internal "bank" absorbs losses. This isn't a tech company it's a retailer with heavy operational costs and meaningful credit risk.

Yet Wall Street remains bullish. The average price target sits around $422, roughly 15% above current levels. The optimism stems from belief that Carvana has tapped into the shift toward digital car buying in an $800 billion U.S. market. New car prices averaging over $50,000 have pushed more buyers toward used vehicles.

Here's the valuation problem: CVNA trades at a forward multiple near 50x earnings, significantly higher than competitors like KMX. Bulls argue Carvana deserves a tech premium for its pure-play digital approach. Bears counter that it's just a capital-intensive retailer with fancier software.

If Carvana misses on earnings or offers cautious guidance tonight, the stock could get hit hard. But even a beat might not be enough if underlying trends in consumer credit and used car pricing continue deteriorating. The real test isn't this quarter numbers it's whether management can articulate a path forward without spooking investors who've already priced in perfection.

For anyone holding CVNA or considering a position, tonight report will reveal whether this rally has room to run or if reality is finally catching up to the hype.

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