Shares of Carvana Co. (CVNA) tumbled 7.34% in pre-market trading on Thursday, following the release of its third-quarter earnings report. Despite posting record revenue and strong growth, investors appeared to focus on the company's earnings per share miss and potential concerns about the sustainability of its rapid expansion.

Carvana reported third-quarter revenue of $5.65 billion, a 55% increase year-over-year and significantly above analyst expectations of $5.08 billion. The company sold 155,941 retail units, marking a 44% rise from the previous year. However, earnings per share came in at $1.03, falling short of the Wall Street estimate of $1.26. This earnings miss, despite the impressive revenue growth, seems to be a key factor in the stock's decline.

While Carvana achieved a record adjusted EBITDA of $637 million and an impressive 11.3% adjusted EBITDA margin, investors appear cautious about the company's future prospects. The sharp stock decline, despite strong financial results and positive forward guidance, suggests that the market may be concerned about factors beyond the headline numbers, such as the sustainability of Carvana's growth trajectory or potential challenges in the used car market. As the company continues to expand its operations and aims to increase its annual retail production capacity to over 1.5 million units by the end of 2025, investors will be closely watching for signs of market saturation or shifts in consumer demand for used vehicles.