Shares of Carvana fell drastically during after-hours trading Wednesday after the company reported full-year guidance that failed to meet some of Wall Street’s expectations for the auto retailer.
Carvana’s stock fell by more than 20% shortly after the company reported its second-quarter results and guiding for earnings of between $2.7 billion and $3 billion this year. The stock recovered some of those losses, but was still trading down roughly 8%.
The guidance was lower than analyst expectations, which included forecasts of $3 billion to $3.2 billion from Deutsche Bank and $4.45 billion from Morgan Stanley.
Here’s how the company performed in the second quarter, compared with average estimates compiled by LSEG:
Earnings per share: 42 cents vs. 41 cents expected
Revenue: $7.38 billion vs. $6.91 billion expected
While topping Wall Street’s EPS and revenue estimates during the second quarter, Carvana’s total gross profit per unit, which is closely watched by investors, was down by roughly 6% and below some analyst expectations.
The guidance means the company expects a relatively flat second half of the year compared with the first six months, with between $1.3 billion and $1.6 billion in adjusted earnings during the second half of this year. Such results would easily top Carvana’s record $2.2 billion in adjusted earnings from 2025.
The new guidance follows the company reporting $1.4 billion in adjusted earnings before interest, taxes, depreciation and amortization during the first half of this year, including a record $769 million during the second quarter that slightly topped LSEG estimates.
