Ernest Garcia II, a significant shareholder of Carvana Co. (NYSE:CVNA), has sold a substantial amount of the company's stock, as reported in recent SEC filings. Garcia, who is known for his role as a ten-percent owner of the online used car retailer, offloaded shares totaling over $19 million.
The transactions, which took place on August 7th and 8th, 2024, saw Garcia sell shares at prices ranging from $128.7564 to $138.511. The sales were executed through a series of transactions at varying prices within these ranges, with the total amounting to $19,907,763. These sales were conducted according to a Rule 10b5-1 trading plan, a mechanism that allows insiders to sell shares at predetermined times and prices to avoid accusations of insider trading.
The shares sold by Garcia are indirectly owned through Verde Investments, Inc., an entity wholly owned and controlled by him. This move has adjusted Garcia's holdings in Carvana, but he remains a significant shareholder through direct and indirect ownership, including stakes held in trusts and LLCs.
Carvana, known for its e-commerce platform for buying and selling used cars, has been a disruptive force in the automotive retail industry, offering consumers a convenient way to shop for vehicles online. The company's performance and stock price are closely watched by investors, and transactions of this scale by a major shareholder are of notable interest.
Investors and market watchers will likely keep an eye on Carvana's stock and any further transactions by Garcia or other significant shareholders. These sales provide insights into the moves by those who have a significant stake in the company's success and direction.
In other recent news, Carvana Co. reported significant growth in its second-quarter results, with a 32.5% year-over-year increase in retail unit sales. This impressive performance led investment firms Jefferies, TD Cowen, DA Davidson, and Piper Sandler to raise their price targets for the company. Jefferies upgraded its target to $150, citing Carvana's strategic capacity expansion, while TD Cowen, DA Davidson, and Piper Sandler raised their targets to $148, $155, and $151 respectively. These revisions reflect the firms' confidence in Carvana's growth trajectory, underpinned by a focus on scaling production capacity and enhancing logistical capabilities.
The company's EBITDA estimate has also been significantly raised, with Jefferies increasing their projection by 39%. Carvana's management provided guidance for third-quarter unit sales to exceed the second quarter's performance, indicating a year-over-year growth rate of over 25%. Furthermore, Carvana's projected EBITDA for 2024 ranges between $1 billion and $1.2 billion, surpassing the consensus estimate of $890 million. These recent developments underscore Carvana's resilience and adaptability in the dynamic market. However, these are merely recent developments and do not provide a comprehensive view of the company's overall performance.
InvestingPro Insights
As Ernest Garcia II adjusts his holdings in Carvana Co. (NYSE:CVNA), investors are keenly observing the company's financial metrics and market performance for indications of its current valuation and future prospects. According to InvestingPro data, Carvana's market capitalization stands at $16.74 billion, reflecting the scale of the business in the online automotive retail market. The company is trading at a P/E ratio of 22.13, suggesting that investors are willing to pay a premium for its earnings relative to the market average. This could be indicative of the market's optimism about the company's growth potential.
One of the InvestingPro Tips highlights that Carvana is trading at a low P/E ratio relative to near-term earnings growth, which could signal an attractive investment opportunity if the company's earnings trajectory continues to be positive. Additionally, analysts have revised their earnings upwards for the upcoming period, as per another InvestingPro Tip, which may further buoy investor confidence in Carvana's financial outlook.
Carvana's revenue for the last twelve months as of Q2 2024 stands at $11.67 billion, with a gross profit of $2.19 billion. The company's gross profit margin is at 18.77%, demonstrating its ability to maintain profitability in its operations. These figures are crucial for investors to understand Carvana's operational efficiency and profitability.
For investors seeking more in-depth analysis and additional InvestingPro Tips, there are currently 13 more tips available at https://www.investing.com/pro/CVNA, which can provide further insights into Carvana's valuation, profitability, and stock price movements.
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