On July 30, Carvana Co. fell 7.7% in pre-market trading. The decline was triggered by the company's first-ever annual profit guidance, which fell short of market expectations. Carvana projected full-year adjusted core profit (EBITDA) of $2.7 billion to $3.0 billion, with the midpoint below the analyst consensus of $2.97 billion. The underwhelming outlook stems from reduced supply of newer used vehicles, which has kept wholesale prices elevated and squeezed dealer margins industry-wide.

Notably, Carvana's Q2 results themselves were strong — revenue of $7.376 billion significantly beat the $6.907 billion estimate, while EPS of $0.42 topped the $0.36 consensus by 16.67%. However, forward-looking supply constraints overshadowed the quarterly beat. Prior to the report, Bank of America had already cut its price target from $88 to $75, and RBC Capital Markets had lowered unit gross profit estimates citing less favorable securitization conditions, reflecting pre-existing institutional caution.

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