Carvana Misses Q4 EBITDA Estimates, EPS $4.22 and Revenue Jumps 59%
Carvana’s Q4 EPS rose to $4.22 and revenue climbed 59% to $5.65B, yet adjusted EBITDA of $511M fell short of the $536M consensus, driving a 6% share drop. Management flagged higher reconditioning costs squeezing margins and expects retail unit sales and EBITDA to expand in fiscal 2026.
1. Q4 Financial Results
Carvana delivered Q4 EPS of $4.22, marking a significant year-over-year increase, while revenue rose 59% to $5.65 billion. Adjusted EBITDA reached $511 million, below the $536 million expectation, resulting in a 10.1% margin.
2. Margins Impacted by Reconditioning Costs
Higher vehicle reconditioning expenses weighed on profitability throughout the quarter. Management indicated these elevated costs are likely to persist into Q1, though profit per unit is projected to improve over time.
3. Outlook for Fiscal 2026
The company provided limited guidance but anticipates growth in retail units sold and adjusted EBITDA for fiscal 2026, assuming stable market conditions. Analysts project first-quarter adjusted EBITDA at approximately $671 million.
4. Stock Reaction
Shares declined about 6% following the earnings release and have fallen over 14% year to date. Some analysts view the pullback as a potential buying opportunity, highlighting execution strengths and unit growth prospects.