Why Is Carvana (CVNA) Down 7.2% Since Last Earnings Report?

A month has gone by since the last earnings report for Carvana (CVNA). Shares have lost about 7.2% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Carvana due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Carvana Co. before we dive into how investors and analysts have reacted as of late.

Carvana Q1 Earnings Beat Estimates

Carvana reported first-quarter 2026 earnings of 34 cents per share, which beat the Zacks Consensus Estimate of 28 cents by 19.01% and increased from 30 cents in the year-ago quarter.

Better-than-expected revenues across all segments drove the strong performance. Revenues of $6.43 billion beat the Zacks Consensus Estimate of $6.16 billion by 4.39% and increased 52% from last year.

CVNA Revenue Mix Skews Toward Retail Strength

Retail vehicle sales rose 62% from last year to $4.83 billion and remained the company’s biggest source of revenues. The growth was driven by selling more vehicles as well as earning more money per vehicle.

Wholesale sales grew 24.9% from last year to $1.08 billion, helped by selling more units. Other sales also increased 35.2% to $526 million, making a solid contribution to the company’s overall revenues.

Carvana Volume Expansion Continues Across Channels

Carvana’s retail vehicle unit sales increased 40% year over year to a record 187,393, extending the company’s recent trend of strong unit growth. Retail revenue per unit improved 15.8% to $25,764, indicating higher selling prices on a per-unit basis versus the prior-year quarter.

Wholesale vehicle unit sales also increased, rising 31.7% to 83,574. Wholesale revenue per unit increased 4.8% to $10,338, suggesting more modest per-vehicle pricing gains in wholesale compared with retail.

CVNA Gross Profit Rises but Total GPU Slips

Total gross profit increased 36.8% year over year to $1.27 billion, reflecting higher volumes across the platform. Retail vehicle gross profit rose 38.2% to $593 million, while wholesale gross profit increased 36.9% to $152 million. Other gross profit also went up 35.2% to $526 million, matching the level of other sales and revenues for the quarter.

Even though total profit increased, profit per vehicle declined. Total gross profit per unit fell to $6,783 from $6,938 last year.

Retail vehicle gross profit per unit dropped slightly to $3,165 from $3,204, while wholesale gross profit per unit decreased to $811 from $829. Other gross profit per unit also went down to $2,807 from $2,905, which led to the overall decline in profit per unit.

Carvana SG&A Dollars Increase, Efficiency Improves

Selling, general and administrative expenses rose to $690 million from $535 million a year ago. Within SG&A, compensation and benefits totaled $245 million, advertising was $118 million, market occupancy costs were $19 million, logistics expense was $48 million and other SG&A costs were $260 million.

The company became more efficient as it sold more vehicles. Its SG&A expense per retail unit fell to $3,682 from $3,996 last year.

By per-unit category, Carvana operations costs were $1,622 per retail unit versus $1,658 a year ago, while overhead declined to $1,073 from $1,299. Advertising expense per retail unit increased to $630 from $538, consistent with higher spending levels as the company continued to drive demand.

CVNA Profitability and Liquidity Position Stay Firm

Operating income increased to $581 million from $394 million last year, helped by higher profits and better control over costs per vehicle. Net income came in at $405 million, with a profit margin of 6.3%. Adjusted EBITDA was $672 million, with a margin of 10.4%, showing overall strong profitability.

As of March 31, 2026, Carvana’s cash and cash equivalents totaled $2.41 billion compared with $2.33 billion as of Dec. 31, 2025. The company also reported total liquidity of $6.91 billion, including cash, available credit, additional borrowing capacity and other financial resources. Its long-term debt totaled $4.85 billion compared with $4.83 billion reported a year ago.

Carvana’s Outlook

In the second quarter, if market conditions remain stable, Carvana expects to sell more cars and generate higher adjusted EBITDA than in the previous quarter, potentially reaching record levels on both. The company also expects strong growth in retail units sold and adjusted EBITDA for the full-year 2026.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 7.77% due to these changes.

VGM Scores

At this time, Carvana has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock has a score of F on the value side, putting it in the bottom 20% quintile for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Carvana has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Carvana is part of the Zacks Internet - Commerce industry. Over the past month, Booking Holdings (BKNG), a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended March 2026 more than a month ago.

Booking Holdings reported revenues of $5.53 billion in the last reported quarter, representing a year-over-year change of +16.2%. EPS of $1.14 for the same period compares with $0.99 a year ago.

Booking Holdings is expected to post earnings of $2.48 per share for the current quarter, representing a year-over-year change of +11.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -7%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Booking Holdings. Also, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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