CVNA - Carvana stock drives 20%+ higher on promise of Q2 adjusted profits

2023-05-04 16:38:31 ET

Carvana ( NYSE: CVNA ) shares rose over 20% at post-market highs on Thursday after exceeding sales expectations and aiming for adjusted EBITDA profitability in Q2.

For the first quarter, the Phoenix-based e-commerce company reported a 25.4% decline in revenue to $2.61B, narrowly better than analyst expectations. The company sold 79,240 retail units, a drop of 25% compared to first quarter 2022 which the company indicated was purposeful in pursuit of higher profitability. Total adjusted gross profit per unit was $4,796, an increase of 61% compared to first quarter 2022, which CEO Ernie Garcia noted was a record.

“The first quarter was a big step in the right direction and there are more steps to come,” Garcia said. “Given our strong start to the year, we expect to achieve positive adjusted EBITDA in Q2 2023. It is clear our strategy and execution are working as evidenced by our 61% increase in gross profit per unit, the best first quarter GPU in company history.”

The company expects to achieve positive adjusted EBITDA in second quarter 2023. Shares of Carvana rocketed 24% higher shortly after the print .

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