UBS has initiated coverage of Carvana Co. (NYSE:CVNA) with a “Buy” rating on Monday, arguing the online used-car retailer is positioned to capture outsized share in a fragmented market as consumers accelerate their shift to digital vehicle purchases.
The brokerage set a 12-month price target of $450, about 20% above Carvana’s last close at $374.50, and said its 2026–27 EBITDA forecasts sit roughly 5% above consensus.
Analysts see a path for the company to grow EBITDA at about a 25% compound annual rate through the decade, supporting what they view as a premium valuation.
UBS called Carvana a “true disruptor,” estimating the company holds just 1.5% of the overall used-vehicle market or about 3% of the retail segment, but could expand its share to roughly 4% by 2030 and as high as 8% over the next 10 years. The firm cited Carvana’s push toward its long-term sales target of 3 million units, helped by rising consumer comfort with buying cars online, which still accounts for only about 2% of used-vehicle sales.
The analysts said Carvana’s e-commerce platform continues to distance itself from its biggest competitor, citing UBS Evidence Lab data showing stronger differentiation in user experience and pricing.
The company’s focus on convenience, including same-day and next-day delivery, is expected to further build brand awareness and draw more traffic to the platform. More customers, in turn, strengthen Carvana’s vehicle acquisition capabilities, helping bolster retail inventory.
UBS also highlighted the sustainability of Carvana’s profitability, noting that its retail gross profit per unit is about double the industry average. The firm expects additional improvements as Carvana generates efficiencies from its inspection and reconditioning centers and continues integrating ADESA auction sites, expanding capacity and supporting higher profit per vehicle.
Valuing the company at 29 times its 2027 EV/EBITDA, the analysts said the multiple is justified by Carvana’s growth profile and aligns with current near-term trading levels.
UBS sees roughly 20% upside in its base case and as much as 48% in its upside scenario, calling the stock’s risk-reward “attractive” with a 1.6x upside/downside skew.