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    Carvana (CVNA) Valuation Check as S&P 500 Inclusion and Rapid Growth Fuel Investor Optimism

    Simply Wall St·12/23/2025 09:28:56
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    Carvana (CVNA) is about to graduate into the S&P 500, and that index promotion is landing right as the business posts double digit growth in units and revenue with sustained profitability.

    See our latest analysis for Carvana.

    The index news caps a remarkable run, with Carvana’s 1 month share price return of nearly 40 percent and year to date share price gain above 100 percent reinforcing strong momentum despite occasional pullbacks. Its 3 year total shareholder return above 10,000 percent shows how dramatically sentiment has swung since the 2022 lows.

    If Carvana’s surge has you rethinking what growth can look like, it might be worth sizing up other auto names by exploring auto manufacturers as potential next ideas.

    With analysts racing to raise targets and index funds poised to buy, Carvana’s valuation now bakes in years of high growth. So is this still an overlooked compounder, or has the market already priced in the next chapter?

    Most Popular Narrative Narrative: 3.4% Overvalued

    Carvana's most followed narrative pegs fair value just below the recent 433.59 dollars close, implying a richly valued story that still assumes powerful growth ahead.

    The analysts have a consensus price target of 414.2 dollars for Carvana based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of 500.0 dollars, and the most bearish reporting a price target of just 330.0 dollars.

    Read the complete narrative.

    Curious what kind of revenue surge, margin lift, and earnings power are being baked into that fair value, and why the views differ so widely? The narrative spells out the aggressive growth runway, the profitability step change, and the punchy future earnings multiple needed to keep this valuation intact, but keeps one crucial assumption hidden in plain sight.

    Result: Fair Value of $419.45 (OVERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, sustained margin gains could prove elusive if logistics and reconditioning bottlenecks persist, or if intensifying digital competition caps Carvana’s pricing power.

    Find out about the key risks to this Carvana narrative.

    Build Your Own Carvana Narrative

    If you are not convinced by this outlook or prefer digging into the numbers yourself, you can build a personalized view in minutes using Do it your way.

    A great starting point for your Carvana research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

    Looking for your next smart idea?

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.