Carvana Raises 2024 Earnings Guidance After Beating Expectations
Carvana, the online used-car retailer, pleasantly surprised investors by significantly surpassing Wall Street’s expectations in the third quarter. This impressive performance has led the company to raise its 2024 earnings guidance, indicating a strong outlook for the future.
In the third quarter, Carvana reported earnings per share of 64 cents, well above the expected 25 cents, and revenue of $3.65 billion, exceeding the estimated $3.45 billion. As a result, the company’s stock surged by approximately 20% in after-hours trading.
Looking ahead, Carvana anticipates its adjusted earnings before interest, taxes, depreciation, and amortization to exceed the high end of its previous target range of $1 billion to $1.2 billion. This optimistic outlook reflects the company’s confidence in a robust finish to the year, with an expected increase in retail vehicle sales during the fourth quarter.
While Carvana’s net income for the third quarter was $148 million, a decline from the previous year’s $741 million due to a one-time gain on debt reduction, its adjusted EBITDA reached $429 million, setting new company records. In comparison, the third quarter of 2023 saw adjusted EBITDA of $148 million and revenue of $2.77 billion.
Despite facing concerns about bankruptcy in late 2022, Carvana has successfully restructured its operations and cut costs, leading to a remarkable 300% increase in its stock price this year. The company’s stock closed at $207.31 per share on Wednesday, nearly reaching a new 52-week high of $213.98 per share earlier in the day.
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