Shares of Carvana Co. (CVNA) surged 17.53% in after-hours trading on Thursday, following the release of its impressive second-quarter earnings report. The online used car retailer significantly outperformed analyst expectations, showcasing robust growth and improved profitability.

Carvana reported earnings of $1.28 per share for Q2, substantially higher than the $0.97 per share analysts had predicted and a dramatic increase from $0.14 in the same period last year. Revenue also impressed, reaching $4.84 billion, up 42% year-over-year and surpassing the expected $4.53 billion. The company's performance was driven by strong retail unit growth, with 143,280 vehicles sold in Q2, marking a 41% increase compared to the previous year.

CEO Ernie Garcia attributed the company's success to its unique, efficient, and vertically integrated business model, stating, "Carvana's industry-leading growth is the result of delivering an experience that customers love, and our industry-leading profitability is driven by our unique, efficient and vertically integrated business model." Looking ahead, Carvana anticipates continued growth, projecting a sequential increase in retail units sold for Q3 2025 and full-year adjusted EBITDA between $2.0 to $2.2 billion, up from $1.38 billion in the previous year.

The strong quarterly results have prompted several analysts to raise their target prices for Carvana. D.A. Davidson increased its target price to $380 from $260, while Piper Sandler and BTIG raised their targets to $440 and $450, respectively. This positive outlook, combined with the strong Q2 results, has bolstered investor confidence in Carvana's ability to maintain its growth trajectory and improve profitability in the competitive automotive market.