CVNA Stock Still Presents 32% Upside For RBC Analyst, Even As Retail Gets More Bearish After Q4 Profit Miss

Retail traders are turning bearish on Carvana as signs of growth are becoming less clear.

• RBC Capital analyst Brad Erickson lowered the firm's price target on Carvana to $440 from $500 and maintained an ‘Outperform’ rating, according to TheFly.
• Wall Street, on average, has a ‘Buy’ rating on the stock, according to Koyfin, with 18 out of 25 analysts rating the Carvana ‘Buy’ or higher.
• Shares of Carvana have declined by more than 21% so far this year, after more than doubling last year.

Carvana Co. shares closed nearly 8% lower on Thursday, snapping a two-day gaining streak after its quarterly profit miss, and analysts remained largely concerned regarding margin growth at the second-hand car retailer.

The stock recorded its worst day in nearly four weeks, following Gotham City Research, which noted that Carvana's 2023-2024 earnings are "overstated by $1 billion plus, and far more dependent on related parties than disclosed."

Shares of Carvana have declined over 21% so far this year after more than doubling last year. A retail user on Stocktwits noted that the stock’s “real fall” won’t be until next week.

Wall Street’s Take On CVNA

RBC Capital analyst Brad Erickson lowered the firm's price target on Carvana to $440 from $500 and maintained an ‘Outperform’ rating, according to The Fly, implying a 32% upside to the last closing price of $332.79.

The firm said the company's fourth quarter was challenging, with in-line units and a gross profit per unit miss, as Carvana is giving more economics back to customers than anticipated to prioritize volume growth.

Wall Street on average has a ‘Buy’ rating on the stock, according to Koyfin, with 18 out of 25 analysts rating the Carvana ‘Buy’ or higher, six ‘Hold’, and one rating it ‘Sell.’ The average price target by analysts is $438.05, implying a 31.6% upside to Thursday’s closing price.

What Is Retail Thinking About CVNA?

Retail sentiment on Carvana was in the ‘bearish’ territory, compared to the ‘neutral’ a week ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

A user on Stocktwits said that the stock will have a “huge red day soon.”

In the last 24 hours, the retail message volume on the stock jumped by more than 30% on Stocktwits, and over the last seven days, the ticker saw a nearly 1% spike in followers on the platform.

Another user on Stocktwits said that the “stock is bananas.” The stock was up nearly 1% during overnight trading on Friday.

Shares of Carvana gained 49% in the last 12 months.

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