The Carvana Glass Tower is ablaze on February 23, 2022 in Oak Brook, Illinois.
Armando L. Sanchez | Tribune News Service | Getty Images
Shares of online used-car retailer Carvana surged on Thursday after the company said its second-quarter results could top its earlier forecast as it implements cost-cutting measures.
Shares were up nearly 60% in late afternoon trading.
Carvana said it now expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to exceed $50 million in the second quarter of 2023. Wall Street analysts surveyed by FactSet had expected the company to roughly achieve a break-even basis.
Carvana said it also expects its second-quarter gross profit per unit, or GPU, to exceed $6,000. This would be a new record for the company and represents an increase of more than 60% compared to the second quarter of 2022.
Carvana’s GPU launch in Q1 2023 is $4,303, a 52% year-over-year increase.
Carvana’s latest guidance, issued in May, calls for positive adjusted EBITDA and adjusted gross profit per unit of $5,000 in the second quarter.
Shares of Carvana surged Thursday after the company raised its second-quarter guidance.
The company’s stock has rallied strongly during the pandemic as buyers turn to online sources for used cars. The company borrowed heavily to meet demand — but found itself in the abyss last year as interest rates started to rise and used-car prices softened. It responded with aggressive cost-cutting measures.
Shares of Carvana are down about 98% in 2022, but have recovered notable losses in recent months: As of Wednesday’s close, the stock was up about 227% since the start of 2023.
“The team has been focused on improving profitability, resulting in significant savings and efficiencies, and that work will continue as we continue to execute on our plan,” Chief Executive Ernie Garcia said in a statement Thursday. Sustained.” “Our advances continue to positively impact the business at a faster rate than anticipated.”