Carvana slumps after core profit forecast disappoints

Shares of online used-car retailer Carvana fell 8.8% to $60.49 premarket after the company forecast annual core profit below estimates, pressured by reduced supply of newer used vehicles.

Carvana expects full-year adjusted core profit to be between $2.7 billion and $3.0 billion, with the midpoint of the range falling short of analysts' estimate of $2.97 billion.

Q2 retail sales rose 38% to 197,325 units from a year ago, while revenue in the same period rose to $7.38 billion from $4.84 billion a year ago.

"CVNA's on a sometimes rocky, but still reliable path to millions of units/year at above-market profitability levels which investors remain skeptical of" - RBC Capital Markets.

At least three analysts cut price targets. The average rating of 27 analysts is "buy"; their median price target is $89 - LSEG-compiled data.

Up to Wednesday's close, CVNA was down 21.5% year to date.