Carvana (CVNA) Stock Drops 3% After First Quarter Earnings Despite Revenue Surge
Retail unit volume totaled 187,393 vehicles in the quarter — representing 40% growth versus the prior year and exceeding the Streets call for 181,839 units. Shares initially popped more than 6% in premarket activity Wednesday evening, but the enthusiasm proved short-lived. By Thursday morning, CVNA was changing hands around $387, reflecting a roughly 3% decline. Profitability Metrics Draw Investor Attention While headline numbers impressed, per-unit economics raised concerns among market participants. The adjusted EBITDA margin registered 10.4%, sliding from the 11.5% achieved a year earlier. Gross profit per vehicle came in at $6,783 — marginally below Street forecasts and down $155 from the $6,938 figure in Q1 2025. Elevated reconditioning expenses represented the primary headwind. Reduced shipping revenue combined with softer wholesale profit margins further pressured unit-level profitability. Wells Fargos David Lantz recognized the margin headwinds while maintaining a balanced perspective, highlighting that the company is “making progress on centralizing planning and decision-making, building better tools, leveraging AI and strengthening training and workforce development.” Carvana disclosed that it has deployed AI-powered internal platforms and enhanced employee training initiatives to address reconditioning cost challenges. “So far in Q2, we are beginning to see the impact of these efforts,” management stated. Forward Outlook Looking to the second quarter, Carvana projected sequential