Carvana Q3 Earnings Exceed Expectations Despite Year-Over-Year Revenue Decline
November 8, 2023
🌥️Trending News
Carvana ($NYSE:CVNA), a leading online used car retailer, recently reported its third-quarter earnings, which exceeded expectations despite a year-over-year decline in revenues. Its mission is to provide a more efficient and transparent way to buy used cars by offering customers a full suite of tools to safely and securely purchase a car online from home. Carvana has earned a strong reputation for its wide selection of quality used vehicles, fast and convenient online purchasing process, and strong customer service. This quarter’s results demonstrate the company’s continued success in meeting customer needs while driving profitable growth.
Earnings
CARVANA recently released its FY2023 Q3 earnings report, revealing that the company earned 3480.0M USD in total revenue and lost 32.0M USD in net income. Although this is a year-over-year revenue decline of 2.8%, CARVANA still managed to exceed expectations. Furthermore, total revenue has increased by 2773.0M USD over the last 3 years. These numbers indicate that CARVANA’s business model is still viable and continues to grow despite the challenges that the company has faced in recent years.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Carvana. More…
| Total Revenues | Net Income | Net Margin |
| 11.18k | -242 | -2.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Carvana. More…
| Operations | Investing | Financing |
| 303 | 7 | -171 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Carvana. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 7.03k | 7.23k | 2.97 |
Key Ratios Snapshot
Some of the financial key ratios for Carvana are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 32.0% | – | -4.0% |
| FCF Margin | ROE | ROA |
| 1.5% | 155.0% | -4.0% |
Price History
On Tuesday, CARVANA, the online used car retailer, announced its third quarter earnings report that exceeded analyst expectations. The news was welcomed by investors as CARVANA’s stock opened at $33.0 and closed at $34.2, up by 2.8% from prior closing price of 33.2. This positive sentiment has further fueled speculation that CARVANA could soon be heading towards a successful IPO despite its current financial situation.
CEO Ernie Garcia III commented on the earnings report saying, “I am proud of our team’s ability to navigate the unprecedented challenges and to continue to deliver on our goals for the quarter.” He added that the company will continue to focus on innovation and expansion as it looks forward to a successful future. Live Quote…
Analysis
At GoodWhale, we recently conducted an analysis of CARVANA‘s finances. According to Star Chart, CARVANA is strong in growth, medium in profitability and weak in asset and dividend. Based on this assessment, we have classified CARVANA as ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. Given its moderate growth potential, investors may be interested in CARVANA if they are looking for steady returns. However, it is important to note that CARVANA has a low health score of 2/10 with regard to its cashflows and debt, which suggests that the company is less likely to pay off debt and fund future operations. Therefore, investors should carefully weigh the risks before investing in CARVANA. More…
Peers
There is fierce competition between Carvana Co and its competitors Vroom Inc, Shift Technologies Inc, and CarMax Inc. All four companies are vying for a share of the online car buying and selling market. Carvana Co has the advantage of being the first mover in the online space and has established a strong brand presence. However, its competitors are not far behind and are quickly catching up. All four companies are investing heavily in marketing and technology to gain an edge over the others. It is likely that the competition between them will intensify in the coming years.
– Vroom Inc ($NASDAQ:VRM)
Vroom Inc is an online used car retailer headquartered in New York City. The company was founded in 2009, and has since grown to become one of the largest online used car retailers in the United States. Vroom offers a wide selection of used cars, trucks, and SUVs, and provides financing, warranty, and delivery options to customers nationwide.
Despite its impressive growth, Vroom has not been profitable, and its Return on Equity (ROE) is negative 112.63%. This is due in part to the high costs associated with acquiring and selling used cars, as well as the need to heavily invest in marketing and customer acquisition.
Vroom’s market cap is 147.78M as of 2022. While this is a sizable number, it is dwarfed by the market caps of some of the largest automakers and retailers in the world. This indicates that there is still room for Vroom to grow, and that investors believe in the company’s long-term prospects.
– Shift Technologies Inc ($NASDAQ:SFT)
Founded in 2013, Shift Technologies Inc is a technology company that provides an online platform for buying and selling used cars. The company has a market cap of $45.76M and a return on equity of 6532.78%. Shift’s platform offers a convenient, transparent and efficient way for customers to buy and sell used cars. The company operates in the United States and Canada.
– CarMax Inc ($NYSE:KMX)
CarMax is the largest retailer of used cars in the United States. The company was founded in 1993 and is headquartered in Richmond, Virginia. CarMax operates over 200 used car dealerships across the country. The company offers a wide variety of makes and models of used cars, trucks, and SUVs. CarMax also offers financing and extended warranties on its vehicles.
CarMax has a market cap of $9.59 billion as of 2022 and a return on equity of 16.04%. The company is a publicly traded company on the New York Stock Exchange (NYSE: KMX). CarMax has been a consistently profitable company since it was founded. The company has grown its revenue and earnings at a double-digit pace over the last decade. CarMax is a well-run company with a strong competitive position in the used car market.
Summary
CARVANA reported better-than-expected third quarter earnings, despite revenues falling year-over-year. Investors should consider the company’s strong fundamentals and immense growth potential when evaluating an investment in CARVANA.
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