Carvana (CVNA) Increases Financial Outlook for Q2 2023
Carvana Co. CVNA updated its second quarter 2023 outlook. The company now expects Adjusted EBITDA above $50 million and non-GAAP total gross profit per unit above $6,000, setting a record and reflecting an improvement of over 63% year-over-year. In the last reported quarter, Carvana’s total GPU (non-GAAP) was $4,796, an increase of $1,811 from the year-ago period. This marked a record Q1 GPU for the company.
Loans sold or securitized quarter-to-date is at approximately $2 billion compared with $1.3 billion quarter-to-date as of May 4th, 2023.
Earnie Garcia, Founder and CEO, Carvana, referred to the record-breaking first-quarter 2023 as evidence for their successful strategy and stated that the updated Q2 2023 outlook demonstrates that the progress continues to positively impact the business beyond their expectations. He also praised the team for driving profitability by cutting costs and improving efficiencies, assuring that the high-quality of work will persist as they continue to execute their plan.
Carvana’s efforts to improve operational efficiencies resulted in improved Q1 2023 financial results, one of the company’s best-performing quarters. These efforts continue as the used car retailer team continues to push its business to improve unit economics through a more robust GPU in Q2 2023 and to generate positive free cash flow in the future.
Over a decade ago, Carvana revolutionized the way people buy used cars. Its integrated e-commerce platform incorporated every aspect of used-car retailing. Its end-to-end, compelling business model disrupted traditional used-car sales by allowing consumers to shop from the comfort of their homes. The customer-centric operations provide buyers with the best user experience, selection and value.
The acquisition of Car360 has enhanced Carvana’s 360-degree photo capabilities with 3D computer vision and augmented reality. The acquisition of ADESA's US operations has solidified Carvana’s logistics network and auction capabilities. It is expected to unlock approximately 2 million units of incremental annual production capacity at full utilization. Carvana’s efforts to expand its market penetration, enter new markets, gain more customers and strengthen its marketing activities are likely to benefit the company.
Zacks Rank & Key Picks
CVNA currently carries a Zacks Rank #3 (Hold).
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