Ernest C. Garcia II, a ten percent owner of Carvana Co. (NYSE:CVNA), recently sold a significant portion of the company's Class A common stock. According to a filing with the Securities and Exchange Commission, Garcia executed sales on October 11 and October 14, totaling $38.3 million. The shares were sold at prices ranging from $188.49 to $194.68 per share.
The sales were conducted through a Rule 10b5-1 trading plan, which allows insiders to set up a predetermined plan to sell stocks. Following these transactions, Garcia's direct ownership of Carvana's Class A shares was reduced to zero. However, he still holds indirect ownership through various trusts.
Carvana, the online used car retailer, has seen its stock fluctuate significantly, and these sales come amid a broader context of market dynamics and company performance. Investors will be watching closely to see how these transactions might impact the company's share price and overall market perception.
In other recent news, Carvana has been the subject of several financial analyses. Stephens reaffirmed an Overweight rating with a $190 price target, while BofA Securities raised its price target to $210, maintaining a Buy rating. These adjustments reflect an anticipation of strong third-quarter results for Carvana. In addition, the company has achieved a significant milestone of four million online vehicle transactions.
Recent projections have raised Carvana's third-quarter unit sales to 107.8 thousand units, marking a 33% increase year-over-year. This development is supported by Citi's research, despite the firm maintaining a neutral stance on Carvana. The company's management projects a year-over-year growth rate of over 25% for third-quarter unit sales, and an EBITDA for 2024 between $1 billion and $1.2 billion, surpassing the consensus estimate of $890 million.
This news follows Carvana's ongoing efforts to navigate a dynamic automotive market, with firms like Evercore ISI and BNP Paribas (OTC:BNPQY) Exane maintaining their neutral ratings. These recent developments reflect the ongoing financial assessments and expectations surrounding Carvana.
InvestingPro Insights
To provide additional context to Ernest C. Garcia II's recent stock sales, let's examine some key financial metrics and insights from InvestingPro for Carvana Co. (NYSE:CVNA).
Carvana's stock has demonstrated remarkable performance, with a 458.28% price total return over the past year. This surge aligns with the timing of Garcia's stock sales, which occurred at prices near the company's 52-week high. In fact, as of the latest data, Carvana is trading at 98.6% of its 52-week high, indicating strong investor confidence.
The company's financial health appears to be improving, with InvestingPro data showing that Carvana has been profitable over the last twelve months. This is a significant turnaround, considering the challenges faced by many retailers during recent economic uncertainties. The company's revenue for the last twelve months stands at $11.67 billion, with a gross profit of $2.19 billion.
InvestingPro Tips highlight that Carvana is currently trading at a high earnings multiple, which could suggest that investors are pricing in expectations for future growth. Additionally, the company operates with a moderate level of debt, which may provide some financial flexibility as it continues to navigate the competitive used car market.
It's worth noting that while Garcia has reduced his direct ownership of Class A shares, Carvana's stock price movements remain quite volatile. This volatility, combined with the company's high return over the last year, may have influenced the timing of the insider's decision to sell.
For investors seeking a more comprehensive analysis, InvestingPro offers 18 additional tips for Carvana, providing a deeper understanding of the company's financial position and market performance.
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