Carvana, ACV Auctions and CarGurus all showed serious chart damage after generally disappointing guidance in their fourth-quarter reports on Wednesday and Thursday.
Carvana stock and ACVA stock broke further below crucial levels of support on Friday. CarGurus stock joined the carnage on Friday, after reporting late Thursday.
The earnings reports offered different insights into the online used car market. Carvana, unlike most of online rivals, sells the used cars it lists. CarGurus connects buyers of new and used vehicles with dealers and individual sellers. ACV provides an online auction platform for car dealers.
AutoNation and CarMax sold off sharply in sympathy.
Carvana Earnings And Outlook; ACV Auctions, CarGurus
After Wednesday's stock market close, Carvana reported record Q4 adjusted EBITDA of $359 million, surging 498% from $60 million a year ago and well above FactSet consensus views for $326.3 million. The online used-car seller posted revenue of $3.547 billion, rebounding 46% year over year, and topping views for $3.342 billion.
During the final quarter of 2024, Carvana sold 114,379 retail units, jumping 50% year over year, and handily outpacing FactSet analyst views for 109,542 retail unit sales.
Carvana's earnings accelerated sharply for a second consecutive quarter, quickening from Q3's 190% gain. But Q4's adjusted EBITDA margin came in at 10%, below Q3's 11.7%, which the company had called an all-time best for public automotive retailers. Total gross profit per unit, a key metric, fell sequentially to $6,671 from Q3's $7,427.
Late Wednesday, the online used-car seller said it "expects significant growth" in retail unit sales and adjusted EBITDA in 2025, including a sequential increase in the current first quarter. However, Carvana said its outlook assumes "the environment remains stable" and it did not offer specific guidance.
Analysts now project that Carvana will deliver adjusted EBITDA of $1.857 billion this year, a 35% increase from 2024.
Despite a still-challenging vehicle market, Carvana continues to recover from a tough couple of years as its unit sales grow again. But a separate filing on Tuesday regarding a $913 million at-the-market equity raise surprised and spooked investors, some analysts said.
Also late Wednesday, ACV Auctions ACV beat Q4 revenue estimates, FactSet shows. But robust guidance for Q1 and 2025 (including 20%-23% revenue growth for the full year) was not quite as strong as anticipated, one analyst said.
Late Thursday, CarGurus posted EPS of 55 cents a share vs. 52 cents per share expected, according to FactSet. But sales of $228.5 million fell slightly short of views for $232.3 million. CarGurus earnings jumped 57% year over year and revenue grew 2%, marking the second straight quarter of topline growth after a seven-quarter slump.
For Q1, the company guided revenue of $216 million-$236 million, below analyst consensus.
Carvana Stock Sinks Near Key Kevel
Shares of Carvana stock plunged 12.1% to 247.64 in stock market action on Thursday. Carvana stock slid a further 10% on Friday, undercutting its 50-day moving average in heavy trade and falling more than 8% below a recent buy point. That triggered the automatic stop-loss rule.
On Feb. 10, CVNA stock had cleared a 268.34 buy point ahead of earnings, the MarketSurge chart shows.
Shares of ACV Auctions tumbled nearly 10% in big volume on Thursday. ACVA stock dropped another 5.2% on Friday, extending its decline below the 200-day line.
CarGurus stock unraveled 17.2% in very heavy trade on Friday, gapping further below the 50-day line but finding support at the 200-day line.
AutoNation and CarMax shares steepened losses into Friday's close. Both auto retail stocks triggered the automatic sell rule after breaking out earlier in February.
CarMax next reports in April.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
