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Carvana (CVNA) Dips More Than Broader Market: What You Should Know

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In the latest trading session, Carvana (CVNA - Free Report) closed at $422.02, marking a -1.75% move from the previous day. The stock's change was less than the S&P 500's daily loss of 0.74%. Elsewhere, the Dow lost 0.63%, while the tech-heavy Nasdaq lost 0.76%.

The stock of company has risen by 12.4% in the past month, leading the Retail-Wholesale sector's loss of 0.41% and the S&P 500's gain of 0.79%.

The investment community will be closely monitoring the performance of Carvana in its forthcoming earnings report. It is anticipated that the company will report an EPS of $1.07, marking a 91.07% rise compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.17 billion, up 45.87% from the year-ago period.

CVNA's full-year Zacks Consensus Estimates are calling for earnings of $5.39 per share and revenue of $19.79 billion. These results would represent year-over-year changes of +238.99% and +44.76%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for Carvana. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Carvana is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, Carvana is presently being traded at a Forward P/E ratio of 79.69. This valuation marks a premium compared to its industry average Forward P/E of 18.89.

Meanwhile, CVNA's PEG ratio is currently 1.4. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Commerce was holding an average PEG ratio of 1.43 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 82, which puts it in the top 34% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow CVNA in the coming trading sessions, be sure to utilize Zacks.com.


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