TEMPE, Ariz.—Daniel J. Gill, Chief Product Officer of Carvana Co. (NYSE:CVNA), recently sold a significant portion of his shares in the company. According to a regulatory filing, Gill sold a total of 44,000 shares of Carvana's Class A common stock over two days, October 23 and October 24. The transactions were executed at prices ranging from $200.11 to $200.18 per share, resulting in a total sale value of approximately $8.8 million.
These sales were made under a Rule 10b5-1 trading plan, which Gill had adopted on June 14, 2023. Following these transactions, Gill retains direct ownership of 283,287 shares of Carvana. The sales come as Carvana continues to navigate the competitive landscape of online car retailing, with its stock performance closely watched by investors.
In other recent news, Carvana has seen significant adjustments to its price targets and earnings per share (EPS) estimates by several firms. Wells Fargo raised its price target to $250 from $175 and increased its EPS estimates for fiscal years 2024 and 2025 to 72 cents and $2.22, respectively. This reflects their confidence in Carvana's improved fundamentals and potential for long-term growth. Similarly, BofA Securities increased its price target to $210 from $185, while Stephens reaffirmed its Overweight rating on Carvana, maintaining its $190 price target.
However, despite these positive adjustments, Citi maintains a neutral stance on Carvana. The company has also reached a milestone of four million online vehicle transactions since its inception. Carvana's management projects a year-over-year growth rate of over 25% for third-quarter unit sales and EBITDA for 2024 between $1 billion and $1.2 billion, surpassing the consensus estimate of $890 million.
These recent developments, along with the revised financial metrics and price targets, provide investors with a revised benchmark for evaluating Carvana's performance. The Overweight ratings from Wells Fargo and Stephens imply that these firms expect Carvana to outperform the average total return of the stocks they cover over the next 6 to 12 months.
InvestingPro Insights
The recent sale of shares by Carvana's Chief Product Officer comes at a time when the company's stock is showing remarkable strength. According to InvestingPro data, Carvana has experienced a staggering 532.01% price total return over the past year, with the stock currently trading at 98.51% of its 52-week high. This robust performance is reflected in the company's market capitalization, which stands at an impressive $42.33 billion.
Despite the strong stock performance, InvestingPro Tips highlight some potential concerns for investors. The stock is currently trading at a high earnings multiple, with a P/E ratio of 32.1. Additionally, the company's Price to Book ratio is exceptionally high at 79.23, suggesting that the stock may be overvalued relative to its book value.
On the operational front, Carvana has shown improvement, with an operating income of $406 million in the last twelve months as of Q2 2023, translating to an operating income margin of 3.48%. This positive trend is further supported by an InvestingPro Tip indicating that the company is expected to be profitable this year.
For investors seeking a more comprehensive analysis, InvestingPro offers 19 additional tips for Carvana, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.