Ernest C. Garcia II, a significant shareholder of Carvana Co. (NYSE:CVNA), recently sold shares of the company's Class A Common Stock, amounting to approximately $38.5 million. The transactions occurred on October 15 and 16, 2024, with the selling prices ranging from $189.41 to $194.82 per share.
The sales were conducted under a Rule 10b5-1 trading plan, which Garcia and Elizabeth Joanne Garcia adopted earlier this year on March 11. Following these transactions, Garcia's direct ownership of Class A shares has been reduced to zero.
Additionally, Garcia executed conversions of Class A Units into Class A shares, although these transactions did not involve any monetary exchange. The conversions were part of an existing Exchange Agreement with Carvana Group, LLC.
Despite the recent sales, Garcia maintains indirect ownership of a substantial number of shares through various trusts and entities, including the Ernest Irrevocable 2004 Trust III and the Ernest C. Garcia III Multi-Generational Trust III.
In other recent news, Carvana's third-quarter unit sales projections have been raised to 107.8 thousand units, a year-over-year increase of 33%, according to Citi's research. This surpasses the consensus estimate and reflects the company's operational efficiencies. Despite the positive adjustments, Citi maintains a neutral stance on Carvana. The company'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.
Stephens reaffirmed its Overweight rating on Carvana with a price target of $190.00, based on the anticipation of Carvana's third-quarter results. BofA Securities raised the price target to $210 from the previous $185 while maintaining a Buy rating, reflecting confidence in Carvana's strategy and market position. However, Evercore ISI and BNP Paribas (OTC:BNPQY) Exane have maintained their In-Line and Neutral ratings respectively.
Carvana has also reached a significant milestone of four million online vehicle transactions since its inception. This includes two million cars sold and an equal number purchased from customers. These recent developments highlight the ongoing financial assessments and expectations surrounding 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 460.74% price total return over the past year and a 179.64% return in the last six months. This aligns with an InvestingPro Tip indicating that the stock has experienced a "high return over the last year."
The company's market capitalization stands at $40.7 billion, reflecting its significant presence in the online used car retail space. Carvana's revenue for the last twelve months as of Q2 2024 was $11.67 billion, with a gross profit of $2.19 billion and an operating income margin of 3.48%. These figures suggest that despite challenges, the company has maintained a substantial market position.
An interesting InvestingPro Tip notes that Carvana is "trading at a low P/E ratio relative to near-term earnings growth," which could be attractive to value-oriented investors. However, it's also worth noting that the stock is "trading near its 52-week high," with the current price at 97.74% of its 52-week peak.
For those considering Carvana's stock, InvestingPro offers 19 additional tips that could provide deeper insights into the company's financial health and market position. These tips, along with real-time metrics, can be valuable tools for investors looking to make informed decisions in the dynamic automotive retail sector.
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