TEMPE, Ariz.—Gregory B. Sullivan, a director at Carvana Co. (NYSE:CVNA), sold 5,000 shares of the company's Class A common stock on November 5th. The shares were sold at a price of $235 each, amounting to a total transaction value of $1.18 million. Following this sale, Sullivan retains ownership of 53,407 shares in the online used-car retailer. The transaction was disclosed in a filing with the U.S. Securities and Exchange Commission.
"In other recent news, Carvana experienced a robust third quarter, with a 34% year-over-year increase in retail units sold contributing to a 32% surge in revenue. This financial performance yielded a net income of $148 million, operating income of $337 million, and an adjusted EBITDA of $429 million. The company's revenue for the quarter reached $3.655 billion. These recent developments underscore the company's ongoing efforts towards sustainable growth and market expansion.
In response to these impressive results, Morgan Stanley (NYSE:MS) upgraded Carvana's stock rating from Underweight to Equal-weight and increased the price target for Carvana's shares to $260.00, up from the previous target of $110.00. The firm's revised rating reflects a more neutral perspective on the company's stock, moving away from the previous cautious stance.
Looking ahead, Carvana plans to increase its advertising spend by $5 million to $10 million in the fourth quarter and anticipates an adjusted EBITDA significantly above the $1.0 billion to $1.2 billion range for the full year 2024. However, it should be noted that the company's non-GAAP SG&A expenses rose 10% to $406 million. Despite this, Carvana achieved milestones of selling and purchasing over 2 million cars, capturing only 1% of the $1 trillion used car market."
InvestingPro Insights
The recent insider sale by Gregory B. Sullivan comes at a time when Carvana's stock has shown remarkable performance. According to InvestingPro data, Carvana has experienced a staggering 619.02% price total return over the past year, with a 94.3% return in just the last six months. This surge has pushed the stock to 92.11% of its 52-week high, reflecting strong investor confidence.
Carvana's financial metrics paint a picture of a company in transition. With a market capitalization of $50.19 billion, the company reported revenue of $12.55 billion in the last twelve months as of Q3 2023, representing a 12.21% growth. More impressively, the company's quarterly revenue growth stood at 31.81% in Q3 2023, indicating accelerating sales momentum.
InvestingPro Tips highlight that Carvana has a perfect Piotroski Score of 9, suggesting strong financial health. Additionally, analysts anticipate sales growth in the current year, which aligns with the company's recent performance. However, it's worth noting that the stock is trading at a high earnings multiple, with a P/E ratio of 1,660, which may raise questions about valuation.
For investors seeking a deeper understanding of Carvana's prospects, InvestingPro offers 21 additional tips, providing a comprehensive view of the company's financial position and market sentiment.
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