Carvana (CVNA) to Report Q3 Earnings: What's in the Offing?
Carvana Co. CVNA is slated to release third-quarter 2023 results on Nov 2, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s loss per share and revenues is pegged at 85 cents and $2.77 billion, respectively.
For the third quarter, the consensus estimate for CVNA’s loss per share has narrowed by a penny in the past 60 days. Its bottom-line estimates imply growth of 68.2% from the year-ago reported number.
The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year decline of 18.3%.
Over the trailing four quarters, CVNA surpassed the consensus estimate on three of the trailing four quarters and missed once, the average surprise being 24.06%. This is depicted in the graph below:
Carvana Co. Price and EPS Surprise
Carvana Co. price-eps-surprise | Carvana Co. Quote
Q2 Highlights
In second-quarter 2023, Carvana incurred a quarterly loss of 55 cents per share, narrower than the Zacks Consensus Estimate of a loss of $1.13. This compares to a loss of $2.35 per share reported a year ago. Carvana posted revenues of $2,968 million in the quarter, outpacing the Zacks Consensus Estimate of $2,625 million but falling 23.5% year over year.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Carvana in third-quarter 2023, as it does not have the right combination of the two key ingredients. A positive Earnings ESP combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: CVNA has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #2.
Things to Note
Carvana’s cost-cutting efforts are paying off. It has completed $1.1 billion of annualized selling, general and administrative expense reductions since the second quarter of 2022. In the last reported quarter, the company managed to achieve its goal of generating positive adjusted EBITDA and also posted a record GPU. For the third quarter of 2023, the used car auto e-retailer expects GPU to exceed $5,500, which is likely to have boosted the result of the quarter to be reported.
On the flip side, the used car auto e-retailer’s revenues are taking a hit amid a decline in units sold. Revenues in the last reported quarter fell 23.5% year over year, owing to a 35% and 16% decline in retail and wholesale units sold, respectively. For third-quarter 2023, the company expects retail unit sales to remain nearly stagnant, which is likely to have marred the result of the quarter to be reported.
Stocks With the Favorable Combination
Here are a few players from the auto space that, according to our model, have the right combination of elements to post an earnings beat this time around.
BorgWarner Inc. BWA will release third-quarter 2023 results on Nov 2. The company currently has an Earnings ESP of +2.87% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BorgWarner’s to-be-reported quarter’s earnings and revenues is pegged at 91 cents per share and $3.72 billion, respectively. BWA surpassed earnings estimates three times in the trailing four quarters and missed once, the average surprise being 14.4%.
Cummins Inc. CMI will release third-quarter 2023 results on Nov 2. The company has an Earnings ESP of +1.55% and a Zacks Rank #3 at present.
The Zacks Consensus Estimate for Cummin’s to-be-reported quarter’s earnings and revenues is pegged at $4.63 per share and $8.14 billion, respectively. CMI surpassed earnings estimates once in the trailing four quarters and missed thrice, the average negative surprise being 5.51%.
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