Carvana Co.'s stock experienced a sharp pre-market plunge of 16.42% on Thursday, following the release of its fourth-quarter financial results after the previous trading session's close.

The online used-car retailer reported revenue of $5.60 billion for the quarter, exceeding analyst expectations. However, investors focused on a miss in key profitability metrics, as Adjusted EBITDA came in at $511 million, falling short of consensus estimates. The sequential decline in Adjusted EBITDA and its margin raised concerns about rising operational costs.

Multiple analysts cut their price targets on the stock, citing concerns over higher-than-anticipated vehicle reconditioning expenses and a murky financial outlook for the year ahead that offered few specific figures despite promising "significant growth." This combination of a profitability miss and vague guidance outweighed the strong top-line performance, triggering the pre-market sell-off.