Carvana sign and signature vending machine in Tempe, Arizona.
Michael Weiland | CNBC
shares of Carvana Shares fell sharply in after-hours trading Wednesday after the company released full-year guidance that fell short of some of Wall Street’s expectations for the auto retailer.
Carvana’s stock price fell more than 20% shortly after the company reported second-quarter results and said it expects this year’s profits to be between $2.7 billion and $3 billion. The stock recouped some of those losses, but was still down about 10% by the time of the company’s earnings call with analysts at 5:30 p.m. ET.
The forecast was lower than analysts including Deutsche Bank’s forecast of $3 billion to $3.2 billion and Morgan Stanley’s forecast of $4.45 billion.
Here’s how the company performed in the second quarter compared to average estimates compiled by LSEG:
Earnings per share: 42 cents vs. 41 cents expected Earnings: $7.38 billion vs. $6.91 billion expected
Although it beat Wall Street’s EPS and revenue estimates for the second quarter, Carvana’s gross profit per unit, which investors are closely watching, fell about 6%, falling below some analysts’ expectations.
This guidance means the company expects the second half of this year to be relatively flat compared to the first half, with adjusted profit in the range of $1.3 billion to $1.6 billion for the second half of this year. If such a result were achieved, Carvana’s adjusted profit for 2025 and beyond would be well above the record $2.2 billion.
The new guidance comes after the company reported adjusted earnings before interest, taxes, depreciation and amortization of $1.4 billion in the first half of this year, including a record $769 million in the second quarter, which slightly beat LSEG’s expectations.
Carvana’s second-quarter results showed net income of $513 million, an increase of $205 million from the same period last year, and vehicle sales from April to June rose 38% to 197,325 vehicles.
The company couldn’t separate new and used car sales, which Carvana has grown to sell. Stellantis Franchise store.
Carvana said it expects retail sales to continue to increase in the third quarter compared to the second quarter, making it the 10th consecutive quarter of being “the fastest growing and most profitable auto retailer, achieving both by significant margin.”
“Q2 2026 marked the 10th consecutive quarter of industry-leading growth and profitability for Carvana, made possible by the foundation we built over the previous decade,” Carvana CEO Ernie Garcia said in a release. “We’ve built an experience that our customers love. Our model improves as we scale, and our execution is a key driver of our progress from here.”
In a quarterly letter to shareholders, Garcia said the company is on track to sell 3 million vehicles annually and achieve an adjusted EBITDA margin of 13.5% from 2030 to 2035.
The company’s adjusted profit margin for the second quarter was 10.4%, down 2 percentage points from the same period last year as it continued its expansion efforts.
“Our used retail market share is only 2%, and our overall auto retail market share is only 1.5%. Our runway is huge,” Garcia said in a note to investors.
