Carvana Co.

New York Stock Exchange
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Slightly Bullish +15

Carvana stock: Morgan Stanley trims target to USD 88 for Carvana stock

Analyst downgrade AI-generated analysis

📈 Carvana sold 197,325 vehicles in Q2 2026, marking a significant 37.70% year-over-year increase in retail unit sales.

💰 Second-quarter revenue reached USD 7.38 billion, up 52.40% year over year and exceeding analyst expectations by 7.70%.

📉 Adjusted EBITDA margin fell to 10.40% from 12.40% despite adjusted EBITDA rising to USD 769 million, indicating pressure on profitability per vehicle.

📉 Morgan Stanley trimmed its price target for Carvana from USD 90.00 to USD 88.00 on October 18, 2026, citing concerns over margin compression.

📊 The stock traded at EUR 52.76 on October 20, 2026, which is 45.79% below its 52-week high of USD 97.38.

📅 Carvana is scheduled to report third-quarter 2026 results and hold a conference call on October 28, 2026, after market close.

💵 The company carries a trailing P/E ratio of 27.48 and a market capitalization of USD 65.2 billion as of late October 2026.

Bullish Signals
  • Carvana achieved robust revenue growth of 52.40% year over year in the second quarter, reaching USD 7.38 billion.
  • Retail unit sales surged by 37.70% to 197,325 vehicles, demonstrating strong demand and volume expansion.
  • Adjusted EBITDA increased to USD 769 million from USD 601 million, reflecting improved absolute profitability despite margin compression.
Risk Factors
  • The adjusted EBITDA margin contracted to 10.40% from 12.40%, signaling challenges in maintaining profitability per vehicle during rapid expansion.
  • Morgan Stanley downgraded its price target from USD 90.00 to USD 88.00, reflecting analyst caution regarding the company's margin trajectory.
Full Analysis
Carvana reported strong second-quarter 2026 results, selling 197,325 vehicles, a 37.70% increase from the prior year. Revenue surged to USD 7.38 billion, representing a 52.40% year-over-year growth that exceeded analyst expectations by 7.70%. The company's stock price rose 1.64% on October 20, 2026, trading at EUR 52.76, though it remains significantly below its 52-week high. Despite the robust top-line growth and volume expansion, profitability per vehicle faced headwinds in the quarter. Adjusted EBITDA increased to USD 769 million from USD 601 million, yet the adjusted EBITDA margin contracted to 10.40% from 12.40%. This divergence between revenue growth and margin compression highlights the challenges Carvana faces in scaling its operations profitably. Analyst sentiment remains cautious following a downgrade by Morgan Stanley on October 18, which trimmed its price target for Carvana from USD 90.00 to USD 88.00 while maintaining an Overweight rating. The stock currently trades at a trailing P/E of 27.48 with a market capitalization of USD 65.2 billion. Investors are awaiting the third-quarter 2026 financial results scheduled for release on October 28, 2026.