After record sales, murky forecast sinks Carvana's stock

By Bill Peters

Shares of the online used-car retailer fall around 15% after hours

Carvana's stock is up 28% over the past 12 months.

Shares of Carvana tumbled some 15% after hours on Wednesday, after the online used-car retailer's outlook for the year ahead offered few specifics, following a year in which sales growth surged.

The company said its goals for the year ahead were roughly the same as last year - selling more cars, growing adjusted profits, improving customer experience and becoming a more efficient company.

Carvana said it expects "significant growth" in sales and profits this year, "assuming the environment remains stable." However, it warned of higher costs to recondition vehicles. The company did not provide specific figures in its forecast.

Carvana (CVNA) issued that outlook as used cars remain expensive, in an auto market that over recent years has dealt with chip constraints, production snags and tariffs.

Wednesday's stock drop follows a 28% run higher for Carvana's shares over the past 12 months, as of the close of Wednesday's trading, and after 2025 sales for the company jumped to a record $20.3 billion.

For the fourth quarter, Carvana reported sales of $5.6 billion. That was above forecasts for $5.27 billion, and also a record. Retail units sold - that is, the number of vehicles the company sells in a given period - jumped 43% to 163,522.

Carvana has been trying to widen its supply of available cars for sale, while speeding up delivery times to customers and shortening shipping distances. However, even as it tries to get people used to buying a car online, it faces competition from Amazon (AMZN), which has crept into the e-commerce market for cars.

-Bill Peters

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

02-18-26 2017ET