Carvana (NYSE:CVNA) Beats Q4 CY2025 Sales Expectations But Stock Drops 20.6%

Anthony Lee

Thu, February 19, 2026 at 6:14 AM GMT+9 3 min read

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  CVNA

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Online used car dealer Carvana (NYSE: CVNA) reported Q4 CY2025 results exceeding the market’s revenue expectations , with sales up 58% year on year to $5.60 billion.

Is now the time to buy Carvana? Find out in our full research report.

Carvana (CVNA) Q4 CY2025 Highlights:

**Revenue:** $5.60 billion vs analyst estimates of $5.25 billion (58% year-on-year growth, 6.8% beat)

**Adjusted EBITDA:** $511 million vs analyst estimates of $539.1 million (9.1% margin, 5.2% miss)

**Operating Margin:** 7.6%, in line with the same quarter last year

**Market Capitalization:** $49.63 billion

Company Overview

Known for its glass tower car vending machines, Carvana (NYSE:CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Carvana’s sales grew at a solid 14.3% compounded annual growth rate over the last three years. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.

Carvana Quarterly Revenue

This quarter, Carvana reported magnificent year-on-year revenue growth of 58%, and its $5.60 billion of revenue beat Wall Street’s estimates by 6.8%.

Looking ahead, sell-side analysts expect revenue to grow 23.3% over the next 12 months, an acceleration versus the last three years. This projection is eye-popping for a company of its scale and suggests its newer products and services will fuel better top-line performance.

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Cash Is King

Although EBITDA is undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Carvana has shown mediocre cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 4.7%, subpar for a consumer internet business. The divergence from its good EBITDA margin stems from its capital-intensive business model, which requires Carvana to make large cash investments in working capital (i.e., stocking inventories) and capital expenditures (i.e., building new facilities).

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Taking a step back, an encouraging sign is that Carvana’s margin expanded by 13.1 percentage points over the last few years. We have no doubt shareholders would like to continue seeing its cash conversion rise as it gives the company more optionality.

Carvana Trailing 12-Month Free Cash Flow Margin

Key Takeaways from Carvana’s Q4 Results

We enjoyed seeing Carvana beat analysts’ revenue expectations this quarter. On the other hand, its EBITDA missed. Overall, this was a softer quarter. The stock traded down 20.6% to $287.30 immediately following the results.

The latest quarter from Carvana’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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