Carvana Dismisses Short Seller Allegations As Misleading: Retailer’s Q4 Earnings Disappoint Wall Street

Carvana said in a statement that the report by Hindenburg included “inaccurate, incomplete, and otherwise misleading information.”

• As per Carvana, it is fully cooperating with the SEC investigation into Hindenburg’s allegations. 
• The company’s adjusted core profit came in at $511 million for the three months through the end of December, below an analyst estimate of $539.14 million.  
• The company now expects “significant growth” in retail sales and adjusted core profit for full year 2026.

Used car retailer Carvana (CVNA) on Wednesday dismissed the allegations raised by short seller Hindenburg Research last year.

Carvana said in a statement that the report by Hindenburg included “inaccurate, incomplete, and otherwise misleading information.”

“We engaged outside legal counsel to independently evaluate the allegations, and voluntarily contacted the U.S. Securities and Exchange Commission (“SEC”). Based upon that evaluation and our own review, we reaffirmed our conclusion that the allegations raised in the short-seller’s report were inaccurate, incomplete, and misleading,” Carvana said.

The company further said that it received a subpoena from the Securities and Exchange Commission requesting information from the company in July 2025. “We are fully cooperating with the SEC Staff,” they said.

Shares of the company fell 15% after hours at the time of writing. 

Hindenburg Allegations

In a report entitled “Carvana: A Father-Son Accounting Grift For Ages,” short-seller Hindenburg Research said in January 2025 that the company’s turnaround is a “mirage.”

The research uncovered $800 million in loan sales to a “suspected undisclosed” related party and details on how accounting manipulation and lax underwriting fueled temporary reported income growth.

“For customers, they face the prospect of inferior or potentially dangerous cars due to cost-cutting measures favoring the bottom line over quality and safety,” Hindenburg said.

“For shareholders and debtholders, we expect they are in for rough times ahead,” it added.

Recent Short Seller Reports

Earlier this year, Gotham City Research also put out a detailed report on Carvana, raising concerns about its earnings being “overstated.”

Gotham City opined in its report that Carvana’s earnings are overstated by over $1 billion and is “far more dependent” on its related parties, DriveTime and Bridgecrest, than disclosed.

“We see problems with accounting, disclosure, and business practices that will lead to regulatory trouble. At best, we believe CVNA is far less profitable than believed, as a standalone business,” Gotham said in its report.

CVNA Earnings Snapshot

Carvana said on Wednesday that it sold 596,641 retail units, marking a growth of 43%, in 2025.

In the fourth quarter alone, the company sold 163,522 retail units and recorded total revenue of $5.603 billion, above an analyst estimate of $5.27 billion, according to data from Fiscal AI.

Adjusted core profit came in at $511 million for the three months, below an analyst estimate of $539.14 million.  

The company now expects “significant growth” in retail sales and adjusted core profit for full year 2026.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around CVNA stock fell from ‘neutral’ to ‘bearish’ territory over the past 24 hours, while message volume rose from ‘normal’ to ‘high’ levels.

CVNA stock has gained 27% over the past 12 months. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.