Shares of Carvana Co. (CVNA) plummeted 9.59% in after-hours trading on Wednesday, despite the online used-car retailer reporting strong third-quarter results and providing an optimistic outlook. The sharp decline comes as a surprise to many investors, given the company's record-breaking performance and improved profitability.

Carvana reported third-quarter revenue of $5.65 billion, up 55% year-over-year and significantly surpassing analyst expectations of $5.08 billion. The company sold 155,941 retail units, marking a 44% increase from the previous year. However, earnings per share (EPS) came in at $1.03, falling short of the $1.26 estimate, which may have contributed to the negative market reaction.

Despite the EPS miss, Carvana highlighted its strong performance with a record adjusted EBITDA of $637 million and an impressive 11.3% adjusted EBITDA margin. CEO Ernie Garcia emphasized the company's focus on "unlocking the structural advantages of our vertically integrated model." Looking ahead, Carvana expects to sell over 150,000 vehicles in Q4 and projects full-year adjusted EBITDA to be at or above the high end of its previously communicated range of $2.0 billion to $2.2 billion. The disconnect between the company's positive results and the stock's decline suggests that investors may be concerned about factors beyond the headline numbers, such as the sustainability of growth or potential challenges in the used car market.