Carvana Co (NYSE: CVNA) has already rallied some 100% over the past three months – but an Oppenheimer analyst believes it still has significant further room to the upside.
Brian Nagel upgraded the used car retailer to “outperform” in a research note this morning, and announced a $450 price target that translates to another 35% upside from current levels.
Carvana stock has handily outperformed its peers like CarMax and Sonic Automotive this year – and the momentum will only continue moving forward, as per the NY-headquartered investment firm.
Here’s why Oppenheimer analyst turned bullish on Carvana stock
Oppenheimer expects CVNA shares to extend gains in the second half of 2025 primarily because its long-term growth and profit potential continues to be underestimated.
In his note to clients, Nagel described the NYSE listed firm as a “digitally-driven disruptor” in a fragmented and inefficient used-car market.
He praised Carvana’s leadership for aggressively restructuring its balance sheet and improving cost efficiencies, which have allowed Carvana to deliver sustained profitability.
Key highlights from Oppenheimer’s analysis include:
- Carvana has trimmed expenses across logistics, staffing, and advertising, boosting margins.
- CVNA is now generating meaningful free cash flow, a stark contrast to its cash-burning past.
- As demand stabilizes, Carvana is capitalizing on its scale, driving EBITDA growth.
- With only about 1% market share, Carvana sees room to grow significantly, estimating 3 million used unit sales over the next 5 – 10 years.
Nagel also pointed to macro tailwinds, such as US tariffs potentially pushing new car prices higher, potentially driving buyers to the used car market and unlocking further upside in Carvana stock in the months ahead.
What to expect from CVNA shares after Q2 earnings on July 30th?
Carvana is scheduled to report its Q2 earnings on July 30th, and expectations are sky high.
Analysts expect the online used car retailer to earn $1.10 a share, representing a staggering 685% year-on-year increase, and revenue of $4.56 billion, up nearly 34%.
Plus, operational metrics look promising as well, with retail unit sales expected to print at about 141,700 – up from 101,440 in the same quarter last year.
Forecasts for adjusted EBITDA currently sits at $524 million or roughly 48% higher that last year. Finally, gross profit per unit is estimated at $7,172, reflecting margin expansion.
If the Tempe-headquartered firm beats these estimates, it could validate Oppenheimer’s bullish thesis and trigger another leg up in Carvana stock.
All in all, CVNA’s tech-driven model and scalable logistics infrastructure are already delivering results, and its upcoming Q2 release could be the inflection point investors have been waiting for to drive the company’s share price to a new all-time high.
That said, Carvana shares remain unattractive for income investors as they don’t currently pay a dividend.
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