MW Carvana is a 'true disruptor,' but does it have room to grow market share?

By Claudia Assis

Migration to online buying favors the used-car retailer, UBS says

Carvana's market share of the used-car market could grow to 8% in a decade, UBS said.

Carvana Co. is a "true disruptor," with an online platform and customer experience that positions it to gain market share in the large but fragmented used-car market.

That's from UBS analyst Joseph Spak, who on Monday started covering Carvana's stock (CVNA) with a buy rating and a price target of $450, implying a 18% upside from Monday's share price.

Carvana is a combination auto retailer and internet-marketplace company and is likely to benefit from a growing familiarity with buying cars - which are most people's second-largest purchase, after a home - completely online, he said.

Spak estimated that Carvana captures about 1.5% of the used-vehicle sales market, including about 3% of the retail market. That share could grow to about 4% by 2030 and about 8% over the next 10 years, he said.

That's on the back of an ongoing migration to online car buying, which currently accounts for only 2% of used-vehicle sales, "as consumers get more comfortable with purchasing online," he said.

UBS also thinks the company has a "best-in-class" e-commerce platform, one that offers people a better experience and "often a better price," he said.

Shares of Carvana have gained about 86% this year, dwarfing the S&P 500 index's SPX advance of around 16% in the same period and contrasting with a loss of nearly 60% for CarMax Inc. $(KMX)$, a well-known competitor that has physical stores as well as a growing online business.

Carvana has faced its share of trepidation, however, and it has new competitors as well, including Amazon.com Inc.'s (AMZN) Amazon Autos. Amazon Autos is more of a lead generator for dealerships, at least for now, as it brings people looking at cars online into their shops, and to a lesser degree is a transaction facilitator thanks to its order-processing capabilities.

Amazon has officially been in the business of selling new and used cars online since December 2024, when it launched Amazon Autos with Hyundai vehicles as part of a deal the two companies had cut a year earlier. This year, the tech giant has announced deals with Hertz Global Holdings Inc. $(HTZ)$ and Ford Motor Co. $(F)$.

Carvana struggled in late 2022 and part of 2023, beset by a cash crisis followed by a bankruptcy-dodging deal with bondholders, but since then has carved out a comfortable and lucrative space for itself.

Read also: Carvana survived a debt crunch. Can it survive Amazon?

-Claudia Assis

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December 01, 2025 13:49 ET (18:49 GMT)

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