Carvana Stock (NYSE: CVNA) Surges To 52 Wk Highs As Q2 Earnings Delivers

Carvana's stock price (NYSE:CVNA) has added more than 10% in per-market trading, adding to the 5% gains seen through the regular session. The stock is buoyed by the company's strong financial results for the second quarter of Fiscal Year 2024, and seems intent to take out 52 week highs on the open.

The online used car retailer not only outperformed market expectations on revenues and earnings but also exhibited significant growth in unit sales and profitability, indicating a robust business performance in a challenging economic environment.

Carvana reported a 15% year-over-year increase in sales during Q2, with the numbers climbing to $3.41 billion, thereby exceeding Wall Street's forecasts. The company's ability to sell 101,440 retail units represented a substantial growth trajectory, showing a sequential and yearly increase of 10% and 33%, respectively. This expansion in units sold underscores Carvana's accelerating market penetration and growing consumer trust in its e-commerce platform.

Furthermore, Carvana achieved an unexpected EPS of $0.39 per share compared to analysts' projections, which anticipated a negative $0.12 EPS on the quarter. This beat is not just a testament to the company's effective cost management and operational efficiencies but also signals its transition to a sustainably profitable business model.

Ernie Garcia, Carvana's CEO, highlighted the stellar performance by drawing attention to the company's EBITDA margin. Achieving an adjusted EBITDA margin of 10.4% set a new record not only for Carvana but also established an all-time high within the public automotive retail sector. With a net income margin of 1.4% for the quarter, the company's bottom-line results further solidified the optimism surrounding its earnings report.

Looking ahead, Carvana anticipates continued sequential growth in retail units sold for the third quarter and has issued a robust forecast for adjusted EBITDA for the full fiscal year. The company projects adjusted EBITDA to be in the range of $1.0 to $1.2 billion, which marks a considerable leap from the $339 million reported in the previous year.

The announcement of these financial achievements and positive outlook for Carvana has evidently resonated with investors, as evident from the post-earnings surge in the company's stock price.