In a recent transaction, Ernest Garcia II, a significant shareholder of Carvana Co. (NYSE:CVNA), sold a substantial number of shares in the company. The sales, totaling over $34 million, were executed on September 19 and 20, 2024, at varying prices ranging from $165.9938 to $176.1125.
The transactions, which were carried out under a pre-arranged trading plan, saw Mr. Garcia dispose of the shares in multiple trades over the two days. The weighted average selling prices for the shares varied each day, with the lowest average price on the first day being $165.9938 and the highest on the second day reaching $176.1125.
The sales come as part of a series of planned transactions, according to a Rule 10b5-1 trading plan adopted by Ernest C. Garcia II and Elizabeth Joanne Garcia earlier in the year. Despite these sales, Mr. Garcia still holds a significant interest in Carvana Co. through direct and indirect ownership, including stakes held in trusts and an LLC.
Carvana, known for its e-commerce platform for buying and selling used cars, has been a notable player in the automotive retail industry. The company's stock, traded under the ticker symbol CVNA, has attracted investor attention as the market for online car sales continues to evolve.
Investors often monitor the buying and selling activities of significant shareholders for insights into company performance and shareholder confidence. The recent transactions by Mr. Garcia represent a notable shift in his investment in Carvana Co., although the reasons for the sales have not been publicly disclosed.
As of the latest filings, Mr. Garcia's remaining holdings in Carvana Co. include both Class A and Class B common stock, with indirect ownership through various family trusts and an LLC. The filings also reflect the conversion of Class A Units into Class A Shares of Carvana Co., affecting the total number of shares owned by Mr. Garcia.
For more detailed information regarding the number of shares sold at each separate price within the reported ranges, the reporting person has committed to providing full information to Carvana Co. or the staff of the Securities and Exchange Commission upon request.
In other recent news, Carvana has been the subject of various analyst reports following robust second-quarter results. BNP Paribas (OTC:BNPQY) Exane maintained a neutral stance on Carvana's shares, citing potential risks to the company's growth if Ally Financial (NYSE:ALLY), a significant collaborator, tightens its credit policies. BofA Securities reinstated coverage on Carvana with a Buy rating, predicting significant long-term growth within the used car market.
Additionally, Evercore ISI increased its price target for Carvana, attributing this to the company's tightened lending practices and increased web traffic. This was echoed by Stephens, who initiated coverage on Carvana with an Overweight rating, projecting EBITDA profitability for the company by the end of the year.
Jefferies raised its price target for Carvana, citing the company's strategic capacity expansion. The firm's revised model shows a 7% increase in their 2025 revenue estimate for Carvana, and a significant 39% increase in their EBITDA estimate.
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%. Carvana's projections for 2024 EBITDA range 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.
InvestingPro Insights
Amidst the news of Ernest Garcia II's sale of Carvana Co. shares, investors and market spectators are keenly observing the company's financial metrics and market performance. A glimpse into the real-time data from InvestingPro reveals some compelling figures that might shed light on the company's current valuation and stock behavior.
Carvana's recent market capitalization stands at approximately $36.98 billion, reflecting its significant presence in the automotive retail industry. Despite a slight decrease in year-over-year revenue by 1.09%, the company has experienced a robust quarterly revenue growth of 14.89%, indicating a potential recovery or growth phase in the near term. The company's P/E ratio is currently at 28.35, which suggests investors are willing to pay a higher price for earnings, possibly due to optimistic future earnings potential. However, it is important to note that the adjusted P/E ratio for the last twelve months as of Q2 2024 is -154.11, which may indicate a discrepancy between the company's earnings and its stock price.
InvestingPro Tips provide additional insights into Carvana's performance and stock valuation. Notably, the stock is currently trading at a high Price/Book multiple of 69.8, which could be of interest to investors looking for growth stocks with potentially undervalued assets. Moreover, Carvana's stock has shown a significant return over the last week, with a 14.55% total price return, aligning with the trend of strong performance over the last three months with a 55.01% total price return.
For investors seeking a deeper dive into Carvana's stock and financial outlook, InvestingPro offers a wealth of additional tips. There are currently 20 more InvestingPro Tips available, which can provide further guidance on the company's earnings revisions, technical indicators, and long-term profitability predictions. These tips can be accessed at https://www.investing.com/pro/CVNA, offering a valuable resource for those looking to make informed investment decisions regarding Carvana Co.
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