Carvana stock slips as profit metric misses estimates, outlook vague

The e-commerce used car dealer posted mixed results for its fourth quarter, with revenue jumping but profits missing estimates.

Published on Feb. 24, 2026

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Carvana (CVNA) stock tumbled after the company posted mixed results for its fourth quarter, with revenue jumping 58% compared to a year ago but adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) missing estimates. Carvana's outlook was also vague, with the company not providing estimates for Q1 results.

Why it matters

Carvana's performance is closely watched as it is one of the fastest-growing and most profitable automotive retailers. The company's results and outlook can provide insights into the broader used car market and consumer demand.

The details

Carvana reported revenue of $5.60 billion versus $5.27 billion estimated, and retail units sold of 163,522 compared with 157,226 estimated. However, the company's adjusted EBITDA of $511 million missed the $535.7 million expected, with an adjusted EBITDA margin of 10.1% missing estimates of 10.4%. Carvana's CEO cited higher reconditioning costs for its vehicles as impacting Q4 results, and expects higher costs in Q1 as well, though it projects higher profit per unit.

  • Carvana posted its fourth quarter results on February 19, 2026.
  • Wall Street expected a Q1 adjusted EBITDA estimate of $671 million, with retail unit sales hitting 175,478.

The players

Carvana

An e-commerce used car dealer and one of the fastest-growing and most profitable automotive retailers.

Ernie Garcia III

The CEO of Carvana.

Gotham City Research

A short seller that alleged Carvana overstated earnings by failing to fully disclose all the benefits it received from DriveTime, a privately held used car retailer and subprime lender owned and controlled by Ernie Garcia II, father of Carvana's CEO.

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What they’re saying

“Looking forward, Carvana expects significant growth in both retail units sold and Adjusted EBITDA in full year 2026, including a sequential increase in both retail units sold and Adjusted EBITDA in Q1 2026, assuming the environment remains stable.”

— Ernie Garcia III, CEO (Carvana)

“We are the fastest growing and most profitable automotive retailer. The path to selling 3 million cars per year at 13.5% Adjusted EBITDA margins by 2030-2035 is clear.”

— Ernie Garcia III, CEO (Carvana)

“Investors will have to grapple with CVNA's longer-term willingness to forgo margin expansion for share gain... Though we again encourage investors to focus on share gain.”

— Marvin Fong, Analyst (BTIG)

What’s next

Carvana's outlook and performance will continue to be closely watched by investors and analysts as the company navigates the used car market and works to achieve its long-term growth targets.

The takeaway

Carvana's mixed Q4 results, with strong revenue growth but weaker-than-expected profits, highlight the challenges the company faces in balancing growth and profitability in the competitive used car market.