Carvana stock price is soaring after the ‘best financial results in company history’

Shares of Carvana Co. are going through the roof in premarket trading this morning after the online used-car retailer posted what its CEO and CFO called its “best financial results in company history.” Carvana stock (ticker: CVNA) is up over 37% in premarket trading as of the time of this writing to $119.49 per share.



The jump in share price comes after Carvana posted its Q1 2024 results yesterday. The company, which was close to bankruptcy just a few years ago, posted revenue of $3.06 billion for the quarter versus the $2.67 billion that Wall Street expected, reports CNBC.



Net income and gross profit surge



But there were two other metrics that really stuck out for investors. First, the company reported a record first-quarter net income of $49 million. That’s compared to a net loss of $286 million in the year-before quarter. And second, the company’s gross profit per unit (GPU), which is the average of how much it makes off of each car sold, hit $6,432, an increase of $2,129.



At nearly $120 per share this morning, Carvana stock has now almost tripled its January low of around $41 per share and is approaching a high it has not seen since April 2022. Of course, Carvana shares are still well below their July 2021 peak, when they were trading around $344 per share. But given that the stock had lost most of its all-time high value less than a year later and the company was in danger of filing for bankruptcy, its Q1 2024 results are music to investors’ ears.



Announcing the latest results, Carvana CEO Ernie Garcia and CFO Mark Jenkins said, “The first quarter was exciting and validating for the team at Carvana. It validated the key convictions we have held since the beginning. It validated the hard work the team has put in over the last two years and demonstrated how effectively and quickly we can move when we align on a goal and fight for it. Our teams have proven their ability to execute.”



What now?



As for looking ahead, the two execs said the company is “now focused on our long-term phase of driving profitable growth and pursuing our goal of becoming the largest and most profitable auto retailer and buying and selling millions of cars.” 



For its Q2, the company said that “as long as the environment remains stable,” it expects a sequential increase in its retail units year-over-year growth rate. Carvana also said that for now, it will focus on quarterly commentary instead of offering predictions for the full 2024 fiscal year.