Ernest C. Garcia II, a major shareholder in Carvana Co. (NYSE:CVNA), has made substantial stock sales amounting to approximately $38.6 million, according to recent filings with the Securities and Exchange Commission. The transactions, executed on October 21 and 22, involved the sale of Class A Common Stock at prices ranging from $189.59 to $197.38 per share.
Garcia, who is recognized as a ten percent owner of the online used car retailer, conducted these sales under a pre-established trading plan, as noted in the filing. The transactions were made in multiple batches, reflecting various weighted average prices within specified ranges. Following these sales, Garcia's direct ownership of Carvana's Class A shares has been adjusted accordingly.
In addition to these sales, the filing also detailed other ownership adjustments, including the conversion of Class A Units into Class A Common Stock, though these transactions did not involve monetary exchanges. The updates highlight the ongoing management of Garcia's significant holdings in Carvana, a company that has been navigating a challenging market environment in the automotive retail sector.
In other recent news, Carvana's financial prospects have been positively evaluated by several firms. Wells Fargo increased its price target for Carvana from $175 to $250, maintaining an Overweight rating. The firm also raised its earnings per share (EPS) estimates for fiscal years 2024 and 2025 to 72 cents and $2.22, respectively. BofA Securities and Stephens also showed confidence in Carvana's growth, with BofA Securities raising its price target to $210 from $185 and Stephens maintaining a $190 price target.
These adjustments reflect Carvana's strong market performance and growing profitability. The company recently achieved the milestone of four million online vehicle transactions since its inception. Furthermore, Carvana's third-quarter unit sales projections have been raised to 107.8 thousand units, indicating a 33% increase year-over-year.
Despite these positive adjustments, Citi maintains a neutral stance on Carvana. Carvana's management projects a year-over-year growth rate of over 25% for third-quarter unit sales and EBITDA for 2024 between $1 billion and $1.2 billion, surpassing the consensus estimate of $890 million. These recent developments highlight the ongoing financial assessments and expectations surrounding Carvana.
InvestingPro Insights
Carvana's recent stock performance aligns with the significant insider sales by Ernest C. Garcia II. According to InvestingPro data, Carvana's stock has shown remarkable strength, with a 521.54% price total return over the past year and a 160.96% return over the last six months. This surge in value provides context for the timing of Garcia's substantial stock sales.
The company's financial metrics offer a mixed picture. While Carvana's revenue for the last twelve months as of Q2 2023 stood at $11.67 billion, it experienced a slight revenue decline of 1.09% during this period. However, the company has shown improvement in profitability, with an adjusted operating income of $406 million and an operating income margin of 3.48% for the same period.
InvestingPro Tips highlight that Carvana is trading near its 52-week high and has demonstrated strong returns over various timeframes. The stock's volatility and high earnings multiple suggest that investors should approach with caution, despite the recent positive momentum.
For investors seeking a more comprehensive analysis, InvestingPro offers 19 additional tips for Carvana, providing a deeper understanding of the company's financial health and market position.
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