MW Carvana sets a high bar for itself. Wall Street has its doubts.

By Claudia Assis

Carvana Co. late Wednesday set an ambitious long-term goal for itself and reported quarterly earnings that beat Wall Street's expectations, but the stock was deep in the red amid economic uncertainty and demand concerns as well as another drop in revenue per retail vehicle sold.

Carvana's shares (CVNA) dropped nearly 6% in the extended session.

The company, an online platform for used-car sales, unveiled its long-term goal of selling 3 million retail vehicles a year at an adjusted Ebitda margin of 13.5% within the next five to 10 years. Its adjusted Ebitda margin for the first quarter was 11.5%.

Carvana reported first-quarter GAAP earnings of $1.51 a share on sales of $4.23 billion. Analysts polled by FactSet expected GAAP earnings of 57 cents a share on sales of $4 billion.

For the current quarter, Carvana said it expects an increase in both the number of vehicles it sells retail and in its adjusted Ebitda, giving no firm numbers as guidance. It said it remained "on track to deliver significant growth in both retail units sold and adjusted Ebitda" this year.

It reported a 6% drop in retail revenue per car sold to $22,256, from $23,673 in the prior-year quarter. It saw a similar drop in the fourth quarter.

There's also the company's rich valuation to contend with, and heady gains already realized this year.

The stock has gained nearly 30% so far this year, and it has more than doubled in the past 12 months. That contrasts with a S&P 500 index's SPX loss of around 4% this year and gains of around 9% for the past 12 months.

-Claudia Assis

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May 07, 2025 16:45 ET (20:45 GMT)

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