UBS Cuts Carvana Target to $485; Artisan Fund Cites 58% Growth
UBS cut Carvana's target price 11% to $485 after Q4 adjusted EBITDA fell short as reconditioning costs rose, driving GPU down 3.7% and margins to 9.1%. Artisan fund noted Q4 revenue up 58% to $5.6 billion and 43% unit sales growth, highlighting the ADESA acquisition’s boost to unit economics.
1. UBS Lowers Target Price
UBS reduced Carvana's price target by 11% to $485 but maintained its Buy rating, attributing the cut to a Q4 adjusted EBITDA shortfall driven by rising reconditioning costs.
2. Q4 Earnings Details
In Q4 2025, Carvana’s adjusted EBITDA grew 42.3% year-over-year but missed expectations as elevated reconditioning costs caused GPU to fall 3.7% to $6,427 per unit and compressed adjusted EBITDA margins by 100 basis points to 9.1% on sales of 163,522 retail units (up 43%).
3. Artisan Fund Position and Growth Outlook
The Artisan Mid Cap Fund initiated a position after Q4 revenue surged 58% to $5.603 billion with unit sales up 43%, citing the acquisition of ADESA’s U.S. auction network as a key driver for enhanced unit economics and a sustainable long-term growth runway.