UBS Reduces Target Price on Carvana (CVNA) to $485 But Keeps Buy Rating, After Q4 Earnings Miss

Carvana Co. (NYSE:CVNA) is 1 of the 14 Best Consumer Discretionary Stocks to Buy Right Now.

On February 20, UBS reduced its people terms connected Carvana by 11.0% to $485 (from $585) but retained its Buy recommendation. This terms update was triggered by Carvana’s Q4 2025 net miss, which the expert attributed to higher (albeit temporary) reconditioning costs and level gross nett per portion (GPU). Despite the outgo challenges, the company’s gross maturation targets stay intact, with Carvana connected way to execute its extremity of selling 3 cardinal retail units per twelvemonth by 2035.

For reference, Carvana released its Q4 2025 net connected February 18, which showed 42.3% YoY maturation successful adjusted EBITDA. Earnings maturation was driven chiefly by volume. The institution sold 163,522 retail units successful Q4, up 43.0% YoY – outpacing accepted utilized car dealers, which grew betwixt -3% and 5% YoY.

Despite the accelerated volume-driven net growth, EBITDA inactive missed analysts’ expectations owed to higher costs. More specifically, Carvana’s absorption singled retired reconditioning costs arsenic exceeding their expectations. The higher outgo translated into a 3.7% YoY diminution successful GPU (from $6,671 to $6,427) and a 100-basis-point YoY contraction successful adjusted EBITDA margins (to 9.1% from 10.1%).

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Carvana Co. (NYSE:CVNA) operates an e-commerce level for buying and selling utilized cars. The institution is based successful Tempe, Arizona, and was founded successful 2012 by Ernest Garcia III, Benjamin Huston, and Ryan Keeton.

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Disclosure: None. This nonfiction is primitively published at Insider Monkey.