Personal Finance

Shares of Carvana Co. Jump 16% After Revenue Soars 127% and Tops Estimates

An eight-story building/vending machine for used cars.

What happened

Shares of Carvana Co. (NYSE: CVNA) , an e-commerce platform for buying used cars with a handful of unique vending machine pickup locations, are popping 16% as of 10:55 a.m. EDT Thursday after the company's second-quarter revenue topped estimates.

So what

Revenue continued flying higher during the second quarter with Carvana recording a 127% gain to $475.3 million, compared to the prior year, which easily topped analysts' estimates calling for $424.1 million. The top line was driven by a 111% increase in retail units sold, up to 22,570 units. Adjusted losses per share reached $0.37, which was higher than analyst estimates calling for a loss of $0.34 per share.

An eight-story building/vending machine for used cars.

Carvana's Houston vending machine. Image source: Carvana.

"We had a strong first half of the year and are on track for our fifth consecutive year of triple-digit revenue growth in 2018. We are well-positioned to benefit from continued momentum as consumers demand a new way to buy a car," said Ernie Garcia, Carvana co-founder and CEO, in a press release.

Now what

There was a lot for investors to be happy about, including total gross profit per unit jumping $672, compared to the prior year, to $2,173 -- an important aspect for investors . EBITDA margin also improved drastically from -16.1% to -8.8%. And while the company posted a wider loss than Wall Street anticipated, Carvana is in the early innings of growth and it's going to be expensive -- it opened nine new markets and four vending machines during the second quarter, bringing its total to 65 and 12, respectively. Looking forward, after a strong first half to 2018, management upped guidance for units, revenue, and gross profit per unit.

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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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