Why Carvana (CVNA) Dipped More Than Broader Market Today

Carvana (CVNA) closed the most recent trading day at $70.28, moving -4.26% from the previous trading session. The stock's change was less than the S&P 500's daily loss of 0.59%. On the other hand, the Dow registered a loss of 0.6%, and the technology-centric Nasdaq decreased by 0.65%.

The company's stock has climbed by 1.28% in the past month, exceeding the Retail-Wholesale sector's loss of 8.48% and the S&P 500's loss of 1.37%.

The investment community will be paying close attention to the earnings performance of Carvana in its upcoming release. The company's upcoming EPS is projected at $0.5, signifying a 138.10% increase compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $7.63 billion, indicating a 35.14% growth compared to the corresponding quarter of the prior year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.68 per share and a revenue of $29.02 billion, signifying shifts of -0.59% and +42.82%, respectively, from the last year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Carvana. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been a 1.58% rise in the Zacks Consensus EPS estimate. Carvana is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Carvana's current valuation metrics, including its Forward P/E ratio of 43.8. This denotes a premium relative to the industry average Forward P/E of 16.19.

It is also worth noting that CVNA currently has a PEG ratio of 2.11. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Internet - Commerce stocks are, on average, holding a PEG ratio of 1.18 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 101, finds itself in the top 42% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow CVNA in the coming trading sessions, be sure to utilize Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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