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Shares of Carvana Co. (CVNA - Free Report) are burning rubber on Wednesday, up 16.82% in early afternoon trading, just one day after the online used car marketplace reported strong results in its first-ever earnings report.
The Phoenix, Arizona-based e-commerce company, which has been called the Amazon (AMZN - Free Report) ) of used cars, went public in late April. Since then, Carvana has caused investors and analysts to get nervous as used car prices keep falling. However, the company actually seemed to benefit from this trend by selling more vehicles.
Yesterday, Carvana reported revenue of $159.1 million, which marked an increase of 118% year-over-year. Although the company only sold 8,334 units in the quarter, it marked an increase of 120% and helped contribute to a 146% jump in gross profits to $9.7 million.
Carvana’s stock is trading at nearly triple its volume today based on its strong quarter, as well as its positive forward-looking statements.
The company expects unit sales in the range of 10,000 to 10,500 and total revenue between $193 million and $203 million in the second quarter. Carvana projects full-year unit sales between 44,000 and 46,000, up from 18,761 units in 2016. The most eye-popping Carvana guidance figure might be that it expects full-year revenue to jump from $365 million last year to between $850 million and $910 million.
“During the quarter we made important enhancements to the customer experience through new product development, resulting in ongoing optimization from website through vehicle delivery,” Carvana founder and CEO Ernie Garcia said in a statement. “We continue to see increased consumer adoption of online car buying across our markets, charting a clear path to consistent growth within the $710 billion U.S. used auto market.”
Unlike Amazon or eBay (EBAY - Free Report) , Carvana currently works in specific markets, as delivering cars is a bit more expensive and difficult than shipping shoes or books. Carvana opened two new retail sites in the first quarter, bringing the company to a total of 23 markets as of the end of March.
Carvana’s unique brick-and-mortar glass tower locations, which the company refers to as "vending machines,” feature clearly visible cars stacked high, offering customers the opportunity to insert a “coin” in order to have their vehicle be dispensed from the glass display case.
If Carvana shoppers don’t want to experience this larger-than-life adult car vending machine, they can choose as-soon-as-next-day home delivery that includes a seven-day test-own policy.
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By last year, it was already generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for those who make the right trades early. See Zacks' Top 3 Stocks to Ride This Space >>
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Here's Why Carvana (CVNA) Stock Keeps Cruising Today
Shares of Carvana Co. (CVNA - Free Report) are burning rubber on Wednesday, up 16.82% in early afternoon trading, just one day after the online used car marketplace reported strong results in its first-ever earnings report.
The Phoenix, Arizona-based e-commerce company, which has been called the Amazon (AMZN - Free Report) ) of used cars, went public in late April. Since then, Carvana has caused investors and analysts to get nervous as used car prices keep falling. However, the company actually seemed to benefit from this trend by selling more vehicles.
Yesterday, Carvana reported revenue of $159.1 million, which marked an increase of 118% year-over-year. Although the company only sold 8,334 units in the quarter, it marked an increase of 120% and helped contribute to a 146% jump in gross profits to $9.7 million.
Carvana’s stock is trading at nearly triple its volume today based on its strong quarter, as well as its positive forward-looking statements.
The company expects unit sales in the range of 10,000 to 10,500 and total revenue between $193 million and $203 million in the second quarter. Carvana projects full-year unit sales between 44,000 and 46,000, up from 18,761 units in 2016. The most eye-popping Carvana guidance figure might be that it expects full-year revenue to jump from $365 million last year to between $850 million and $910 million.
“During the quarter we made important enhancements to the customer experience through new product development, resulting in ongoing optimization from website through vehicle delivery,” Carvana founder and CEO Ernie Garcia said in a statement. “We continue to see increased consumer adoption of online car buying across our markets, charting a clear path to consistent growth within the $710 billion U.S. used auto market.”
Unlike Amazon or eBay (EBAY - Free Report) , Carvana currently works in specific markets, as delivering cars is a bit more expensive and difficult than shipping shoes or books. Carvana opened two new retail sites in the first quarter, bringing the company to a total of 23 markets as of the end of March.
Carvana’s unique brick-and-mortar glass tower locations, which the company refers to as "vending machines,” feature clearly visible cars stacked high, offering customers the opportunity to insert a “coin” in order to have their vehicle be dispensed from the glass display case.
If Carvana shoppers don’t want to experience this larger-than-life adult car vending machine, they can choose as-soon-as-next-day home delivery that includes a seven-day test-own policy.
3 Stocks to Ride a 588% Revenue Explosion
At Zacks, we're mostly focused on short-term profit cycles, but the hottest of all technology mega-trends is starting to take hold...
By last year, it was already generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for those who make the right trades early. See Zacks' Top 3 Stocks to Ride This Space >>