Carvana, that purveyor of online car transactions, reported its fourth quarter results on February 18th. The stock, predictably, wobbled. So it goes.
They sold $5.6 billion worth of vehicles, which was $330 million more than everyone expected. A 58% increase year over year. 43% more cars rolling off the virtual lot. Earnings per share clocked in at $4.22. Wall Street was hoping for $1.13. Numbers, numbers. They mean something, I suppose, until they don’t. But the important metric, the one that really matters to people who own stock, was…less good.
The stock is down about 12% since that report landed. And, naturally, there’s a war happening. A perfectly reasonable time to be worried about used car margins, wouldn’t you say? So it goes.
Carvana’s adjusted EBITDA—that’s Earnings Before Interest, Taxes, Depreciation, and Amortization, for those keeping score—came in at $511 million. Analysts wanted $535.7 million. A difference of $24.7 million. Not enough to cause a global panic, but enough to make some people unhappy. Their adjusted EBITDA margin was 10.4%, slightly off the 10.4% everyone was anticipating. The precision of it all is… amusing.
Then there’s Gotham City Research, who published a report suggesting Carvana has been… creatively accounting. It involves related-party transactions, and the family of the CEO, Ernie Garcia. His father owns both DriveTime Automotive and Bridgecrest Acceptance. It’s complicated. Families are always complicated. And businesses, especially. The report alleges Carvana relies on these companies for servicing and financing. It’s a web, naturally. Everything is connected to everything else. So it goes.
Now, these connections don’t necessarily mean anything nefarious is happening. It just means things are… close. And when things are close, people get suspicious. It’s human nature. We look for patterns, even where none exist. Or, perhaps, especially where none exist.
The forward guidance Carvana issued was… vague. They said they’re committed to growth and profit. They’ll be selling more cars, making more money, in 2026. But they didn’t say how much more. Specificity is a lost art. It’s easier to promise everything and deliver… something.
So, what to do? I’d suggest waiting. Let the stock drift lower. Let the dust settle. There will be other opportunities. There always are. The market is a vast, indifferent machine. It doesn’t care about your hopes or your dreams. It just keeps turning. So it goes.
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2026-03-03 22:43