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

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In the latest close session, Carvana (CVNA - Free Report) was down 2.12% at $458.61. This change lagged the S&P 500's 0.53% loss on the day. Meanwhile, the Dow lost 0.09%, and the Nasdaq, a tech-heavy index, lost 1%.

Shares of the company have appreciated by 2.94% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 5.07%, and outperforming the S&P 500's gain of 2.06%.

Investors will be eagerly watching for the performance of Carvana in its upcoming earnings disclosure. The company is forecasted to report an EPS of $1.1, showcasing a 96.43% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $5.23 billion, up 47.5% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.49 per share and revenue of $19.95 billion. These totals would mark changes of +245.28% and 0%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Carvana. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.78% lower. Carvana currently has a Zacks Rank of #3 (Hold).

Looking at valuation, Carvana is presently trading at a Forward P/E ratio of 64.13. This represents a premium compared to its industry average Forward P/E of 17.75.

It is also worth noting that CVNA currently has a PEG ratio of 1.13. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Internet - Commerce industry was having an average PEG ratio of 1.15.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 173, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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