Carvana Stock Falls on Earnings Miss. Morgan Stanley Still Sees Upside

Carvana Stock Falls on Earnings Miss. Morgan Stanley Still Sees Upside

Nauman Khan

Fri, February 20, 2026 at 1:27 AM GMT+9 1 min read

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  •                                       StockStory Top Pick 
    

    CVNA

    -8.49%

This article first appeared on GuruFocus.

Carvana (NYSE:CVNA) shares slid about 6% on Thursday after the online used-car retailer missed some fourth-quarter profitability metrics despite sharply higher earnings.

Carvana reported fourth-quarter earnings of $4.22 per share, up sharply from a year earlier, while revenue climbed 59% to $5.65 billion. Analysts had expected earnings of $1.14 per share on $5.27 billion of revenue, according to FactSet.

Warning! GuruFocus has detected 3 Warning Sign with CVNA.
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Adjusted EBITDA came in at $511 million, below estimates of about $536 million. The adjusted margin was 10.1%, slightly under expectations.

Chief executive Ernie Garcia said higher vehicle reconditioning costs weighed on results and are likely to remain elevated in the first quarter, though profit per unit is expected to improve.

Carvana offered limited detail on near-term guidance, saying it expects growth in retail units sold and adjusted EBITDA in fiscal 2026, assuming stable market conditions.

Analysts expect first-quarter adjusted EBITDA of $671 million.

Despite the selloff, Morgan Stanley said the pullback may offer upside, citing execution and unit growth potential.

Carvana is down more than 14% so far this year, lagging the broader S&P 500.

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