Carvana Gets a Buy Rating and $185 Price Target from BofA Securities

BofA Securities analyst Michael McGovern has issued a Buy rating for Carvana Co. (CVNA) with a price target of $185. McGovern believes the company is poised for sustained long-term growth in the fragmented $800 billion+ used car market. He expects Carvana to maintain recent improvements in unit economics and leverage as its growth accelerates.

McGovern anticipates a recovery in the used car market as prices normalize, car supply returns, and interest rates begin to fall. While used car sales are currently about 20% below pre-COVID levels, McGovern expects further recovery as interest rates decline.

The analyst projects Carvana’s 2025 revenue to reach $15.45 billion with an EBITDA of $1.50 billion, slightly surpassing Street estimates of $15.31 billion and $1.46 billion respectively. These projections are based on a 20% gross margin and SG&A expenses at 14% of revenue for the year.

Looking ahead to 2026, McGovern anticipates 20% revenue growth driven by high-teens retail unit growth. He emphasizes that near-term profit estimates are achievable without significant new capacity investments as unit growth accelerates and less reconditioning site expansion is needed.

Investors interested in gaining exposure to GitLab can consider the Tidal ETF Trust II Pinnacle Focused Opportunities ETF (FCUS) and the Global X E-commerce ETF (EBIZ).

As of Tuesday, CVNA shares were trading up 1.09% at $154.56.

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