CARVANA CO (NYSE:CVNA) – A Strong Contender for Growth Investors

CARVANA CO (NYSE:CVNA) stands out as a potential candidate for investors following Louis Navellier’s growth-focused strategy. The company, an e-commerce platform for buying and selling used cars, meets several key criteria outlined in Navellier’s approach, including strong earnings revisions, accelerating sales, and high return on equity. Below, we examine why CVNA aligns with these principles.

Key Strengths of CVNA

• Positive Earnings Revisions: Analysts have raised EPS estimates for the next quarter by 41.3% over the last three months, signaling confidence in future performance.
• Strong Earnings Surprises: The company has surpassed earnings expectations in each of the last four quarters, with an average surprise of 169.4%.
• Rapid Sales Growth: Year-over-year revenue growth stands at 32.2%, while quarterly sales growth accelerated to 38.3%, indicating strong demand.
• Expanding Profitability: Operating margin surged 392.4% over the past year, reflecting improved cost efficiency.
• High Return on Equity: CVNA’s ROE of 26.5% is well above the industry average, demonstrating effective use of shareholder capital.

Fundamental Overview

CVNA’s financial health is solid, with a strong liquidity position (Current Ratio: 3.81) and manageable debt levels. While its valuation appears elevated (P/E of 120.5), this is partly justified by its high growth trajectory, including a 260.1% jump in EPS over the past year. Analysts expect further earnings growth of 42.9% annually in the coming years.

For a deeper dive into CVNA’s fundamentals, review the full analysis here.

Our Little Book Growth Stock Screener provides more stocks that fit this strategy.

Disclaimer

This is not investing advice. The observations here are based on current data, but investors should conduct their own research before making decisions.