Carvana Co. (NYSE:CVNA) is showing signs of robust end-of-year momentum, according to Jefferies analysts, who reiterated a ‘Buy’ rating and maintained a $550 price target on the used car sales platform.
This price target implies 37% upside from Monday’s close of about $400.
Jefferies cited preliminary web scrape data suggesting that Carvana’s retail unit sales grew 49% year-over-year during the first two weeks of December, an acceleration from 39% in October and 46% in November.
"If we assume two-year growth in the back half of December is consistent with the preceding four weeks, Retail Units would grow 44% in Q4 and imply 7% upside to consensus," the analysts wrote.
The broker noted that Carvana’s inventory growth has remained strong, consistently above 50% year-over-year since mid-October, and that vehicle pricing trends have also supported revenue growth.
"Our scrape indicates CVNA's average vehicle selling price ($25,400) increased 2% year-over-year in November, in line with broader industry growth," the analysts wrote, while also noting a modest 1% year-over-year decline in early December, consistent with Carvana’s plan to pass gains through to consumers.
Monthly active users on Carvana’s platform also accelerated in December, rising 37% year-over-year, up from 28% to 32% in prior months, providing further support for fourth-quarter unit growth.
Jefferies wrote that this traffic growth, coupled with unit sales momentum, could exceed street expectations for 35% growth in retail units in Q4.
Despite raising fourth-quarter EBITDA estimates to $522 million, the firm maintained a $550 price target. "Our $550 price target continues to reflect 32x 2027 EV/EBITDA, representing a 25%+ premium to KMX to account for faster growth," the analysts wrote.
Jefferies highlighted that while their web scrape-based estimates are slightly above consensus, they remain conservative relative to the data, reflecting potential margin of error and the evolving sales environment.