UBS Reduces Target Price on Carvana (CVNA) to $485 But Keeps Buy Rating, After Q4 Earnings Miss

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UBS Reduces Target Price on Carvana (CVNA) to 5 But Keeps Buy Rating, After Q4 Earnings Miss — UBS Reduces Target Price on Carvana CVNA to 485 But.jpeg

Carvana Co. (NYSE:CVNA) is a standout among the 14 Best Consumer Discretionary Stocks to Buy Right Now, according to a recent report by UBS. Despite a slight setback in Q4 2025 earnings, Carvana remains a strong contender in the used car market.

On February 20, UBS revised its target price for Carvana to $485, down 11.0% from $585, while maintaining its Buy recommendation. The adjustment was prompted by Carvana’s Q4 earnings miss, attributed to temporary reconditioning costs and flat gross profit per unit (GPU). However, the company remains steadfast in achieving its revenue growth targets, aiming to sell 3 million retail units annually by 2035.

In the Q4 2025 earnings report released on February 18, Carvana saw a 42.3% year-over-year growth in adjusted EBITDA, driven by a surge in volume. The company sold 163,522 retail units in Q4, representing a 43.0% increase from the previous year, outpacing traditional used auto dealers.

Despite the impressive volume-driven earnings growth, Carvana fell short of analysts’ expectations due to higher costs, particularly in reconditioning. This led to a 3.7% year-over-year decline in GPU and a 100-basis-point contraction in adjusted EBITDA margins.

Carvana, operating as an e-commerce platform for buying and selling used cars, was founded in 2012 in Tempe, Arizona. The company’s mission is to revolutionize the car-buying experience through innovative technology and customer-centric practices.

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In conclusion, Carvana’s resilience in the face of challenges and commitment to growth make it a compelling player in the consumer discretionary sector. As the company continues to innovate and expand its reach, investors can expect exciting developments in the used car market.