Ernest C. Garcia II, a significant shareholder of Carvana Co. (NYSE:CVNA), recently sold a substantial portion of his holdings in the company. On October 25, Garcia sold a total of 15,814 shares of Carvana's Class A Common Stock. The sales were executed at prices ranging from $198.80 to $203.27 per share, accumulating a total value of approximately $3.18 million.
Following these transactions, Garcia's direct ownership of Carvana's Class A Common Stock has been reduced to zero shares. The sales were carried out under a pre-established Rule 10b5-1 trading plan, which Garcia and Elizabeth Joanne Garcia adopted earlier this year in March.
In addition to these sales, Garcia also converted 15,814 Class A Units of Carvana Group, LLC into Class A Common Stock of Carvana Co. This conversion was conducted under the terms of an Exchange Agreement established in 2017.
Garcia continues to hold indirect ownership stakes in Carvana through various trusts, maintaining significant influence over the company's stock.
In other recent news, Carvana has seen significant adjustments to its price targets and earnings per share (EPS) estimates by several firms. Wells Fargo (NYSE:WFC) raised its price target to $250 from $175, citing the company's improving fundamentals and potential for long-term growth. Similarly, BofA Securities increased its price target to $210 from $185, highlighting Carvana's strategy and market position. Stephens reaffirmed its Overweight rating on Carvana, maintaining its $190 price target.
These firms also revised their EPS estimates for Carvana. Wells Fargo set new forecasts at 72 cents and $2.22 for fiscal years 2024 and 2025, reflecting confidence in Carvana's financial improvement. Despite these adjustments, Citi maintains a neutral stance on Carvana.
Carvana has reached a milestone of four million online vehicle transactions since its inception. The company's third-quarter unit sales projections have been raised to 107.8 thousand units, marking a 33% increase year-over-year. Carvana's management projects a year-over-year growth rate of over 25% for third-quarter unit sales and EBITDA for 2024 between $1 billion and $1.2 billion, surpassing the consensus estimate of $890 million. These are among the recent developments for Carvana.
InvestingPro Insights
As Ernest C. Garcia II reduces his direct stake in Carvana Co. (NYSE:CVNA), investors might be curious about the company's current financial standing and market performance. According to InvestingPro data, Carvana's stock has shown remarkable strength, with a 587.24% price total return over the past year. This impressive performance is further emphasized by the stock trading at 99.42% of its 52-week high, indicating strong investor confidence.
Despite the recent insider selling, Carvana's financials show some positive trends. The company reported revenue of $11.67 billion in the last twelve months as of Q2 2024, with a gross profit margin of 18.77%. Notably, Carvana's EBITDA growth stands at an impressive 278.35% for the same period, suggesting improved operational efficiency.
InvestingPro Tips highlight that Carvana is trading at a low P/E ratio relative to its near-term earnings growth, which could be attractive to value investors. Additionally, the company's liquid assets exceed short-term obligations, indicating a solid short-term financial position.
However, potential investors should note that Carvana operates with a moderate level of debt and its stock price movements are quite volatile. These factors, along with the company trading at high EBIT and EBITDA valuation multiples, suggest that careful consideration is warranted.
For those interested in a deeper analysis, InvestingPro offers 19 additional tips for Carvana, providing a comprehensive view of the company's prospects and potential risks.
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