Core Viewpoint - Carvana's stock has experienced significant volatility, with a recent decline of approximately 27% from its January peak, indicating potential challenges ahead as used car demand shows signs of weakening [1][10]. Company Performance - Carvana's revenue for Q3 2025 reached a record $5.65 billion, reflecting a year-over-year increase of 54.5%, with 156,000 vehicles delivered, showcasing a remarkable turnaround from near-bankruptcy in 2022 [5][4]. - Despite impressive past performance, the company's valuation appears stretched, and cash-flow trends are weakening, raising concerns about sustainability [10]. Market Dynamics - The demand for used cars is projected to decline, with retail sales expected to fall by 0.7% in 2026 to 20.3 million units due to lower new car production and weak electric vehicle demand [6]. - Average used car prices have increased to $28,550 in January 2026, up $490 year over year, which may challenge affordability for consumers [6]. Financing Environment - Financing costs for used cars are significantly higher, with loan rates between 10% to 12% APR compared to 6% to 7% for new cars, which could deter potential buyers and impact Carvana's growth [7][10]. - The increasing cost of financing makes the value proposition of used cars less attractive, especially when compared to new cars with promotional rates [7]. Insider Activity - There are concerning signs from insider trading, with CEO Ernest Garcia III selling over $1.4 billion in shares since April 2024, including more than $500 million in August 2025, raising agency risk concerns due to the Garcia family's control of 84% of voting power [9][10]. Regulatory and Legal Issues - Gotham City Research has accused Carvana of concealing over $1 billion in expenses through related-party transactions, which led to a significant drop in stock price [10]. Consumer Behavior - The market for buying used cars online has not yet become a habitual choice for consumers, making it a more considered purchase, especially in a high-interest rate environment [11].

Core Viewpoint - Carvana's stock dropped 14.98% over the past week, driven by insider selling, negative social media sentiment, and competitive pressures in the used car market [1]. Insider Selling - Carvana's executives have been liquidating shares systematically, with CFO Mark Jenkins selling 12,058 shares and COO Benjamin Huston unloading 10,628 shares on February 2, 2026 [1]. - A pattern of coordinated selling has been observed, with multiple executives selling shares at similar prices, indicating a lack of confidence in the company's future [1]. - Notably, there have been no open-market purchases by executives recently, contrasting with 55 purchases made in the previous year [1]. Retail Investor Sentiment - Sentiment on Reddit turned bearish, with discussions around fraud allegations gaining traction, leading to a drop in sentiment scores from 18 to 10-12 [1]. - A post titled "Carvana $CVNA Fraud Comes To Light" received 153 upvotes, indicating growing concern among retail investors [1]. - Options traders are also positioning for downside, suggesting a bearish outlook among retail investors [1]. Competitive Landscape - Carvana's primary competitor, CarMax, also experienced a decline of 12.19% this week, indicating sector-wide pressures rather than company-specific issues [1]. - Carvana trades at a significantly higher valuation of 78x earnings compared to CarMax's 15x, which raises concerns about its ability to weather market challenges [1]. - Both companies are facing tightening consumer spending, but Carvana's high valuation leaves little room for error [1].

Core Viewpoint - Carvana's stock has experienced a significant decline of 14.98% over the past week, driven by insider selling and negative sentiment on social media regarding potential fraud allegations [2][6]. Group 1: Stock Performance - Carvana closed at $343.19, marking a year-to-date decline of 18.68%, although it remains up 26% over the past year [2]. - The broader market and Consumer Discretionary sector saw smaller declines of 1.29% and 1.54%, respectively, indicating Carvana's performance is notably worse than its peers [2]. Group 2: Insider Selling - Carvana's executives have been actively selling shares, with CFO Mark Jenkins selling 12,058 shares and COO Benjamin Huston unloading 10,628 shares on February 2, 2026 [3]. - This trend of selling has been ongoing, with Chief Product Officer Daniel Gill selling over 120,000 shares in December 2025 at prices between $429 and $476 [4]. - The lack of open-market purchases by executives raises concerns about confidence in the company's future, as only 55 open market buys were recorded over the past year [5]. Group 3: Retail Investor Sentiment - Sentiment among retail investors has turned negative, particularly on Reddit, where discussions about Carvana shifted from valuation concerns to serious allegations of fraud [6]. - A post alleging fraud gained significant traction, receiving 153 upvotes and 145 comments, indicating a growing concern among retail investors [6]. - Sentiment scores for Carvana dropped from 18 to a range of 10-12, reflecting the deteriorating perception of the company [7]. Group 4: Valuation Comparison - Carvana's price-to-earnings ratio stands at 78x, significantly higher than CarMax's 15x, highlighting a disparity in valuation amidst sector pressures [7].

Core Insights - Maverick Capital Ltd. established long positions in Google C, Applied Materials, Boston Scientific, Visa, and Camden Property during the fourth quarter [1] - The firm increased its holdings in TSMC, NVIDIA, GFL Environment, and Carvana [1] - Maverick Capital completely exited positions in Kenvue, US Bancorp, AMD, Danaher, and Insmed [1] - The company reduced its stakes in Nubank, Disney, Merit Medical, Acadia Health, and Sherwin-Williams [1] - The firm maintains significant positions in NVIDIA, Microsoft, Amazon, TSMC, and Google C [1]

Core Viewpoint - Carvana's upcoming earnings report on February 18, 2026, is critical for investors, as it may redefine the company's narrative following its turnaround and inclusion in the S&P 500 Index [1][2]. Company Overview - Carvana is an e-commerce platform specializing in the online buying, selling, financing, and home delivery of used vehicles, based in Tempe, Arizona [4]. - Since its IPO in 2017, Carvana has transformed from near-bankruptcy to achieving strong profitability margins, streamlined operations, and rapid sales growth, currently holding a market capitalization of $74.8 billion [5]. Financial Performance - The company has shown significant growth in retail unit sales and revenue, marking a turnaround from previous years of volatility and losses [6]. - Carvana's stock reached a 52-week high of $486.89 on January 23, 2026, driven by improved fundamentals and investor confidence [6]. Market Dynamics - Despite a strong performance, Carvana's stock has retreated by 29.3% from its peak, with total 52-week returns at approximately 27% [7]. - Recent investor anxiety has been fueled by a report from Gotham City Research alleging accounting irregularities, leading to a nearly 14% decline in stock price over the past five days and an 18% drop year-to-date [8].

$1 Billion Accounting Questions Cloud Carvana's 44% Sales Surge - 24/7 Wall St.[S&P 5006,845.40 -0.04%] [Dow Jones49,492.90 0.00%][Nasdaq 10024,745.00 -0.06%][Russell 20002,627.30 +0.44%][FTSE 10010,403.00 -0.31%][Nikkei 22557,553.00 +0.94%][Investing]# $1 Billion Accounting Questions Cloud Carvana's 44% Sales Surge### Quick ReadCarvana (CVNA) fell 21.62% after Gotham City Research alleged over $1B earnings overstatement through undisclosed transactions.Carvana insiders sold over $500M in recent months. Mul ...

Core Insights - The Power Inflow alert is a proprietary signal from TradePulse that indicates a significant shift in order flow towards buying activity, suggesting a high probability of bullish price movement for the day [1] Group 1: Power Inflow Signal - The Power Inflow alert is issued within the first two hours of the trading day [1] - It highlights strong buying trends, making it a strategic entry point for active traders [1] Group 2: Order Flow Analytics - Order flow analytics provide insights into real-time buying and selling trends by examining volume, timing, and order size [2] - These insights enhance understanding of price behavior and market sentiment, aiding informed decision-making [2] Group 3: CVNA Performance - At the time of the Power Inflow, CVNA was priced at $338.2 [3] - Following the signal, CVNA reached an intraday high of $351.66, reflecting a 3.98% increase [3]

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Carvana Co. regarding violations of federal securities laws and unlawful business practices [1][2]. Investigation Details - A report by Gotham City Research on January 28, 2025, alleged that Carvana's reported profitability is based on undisclosed related-party transactions with DriveTime and Bridgecrest. It claims that DriveTime incurred over $1 billion in cash losses while leveraging 20x to 40x EBITDA to support Carvana's earnings, and that Bridgecrest marked down billions in loans as Carvana recognized gains on loan sales [2]. - Following the report, Carvana's share price dropped by $67.68, or approximately 14.2%, from $477.72 on January 27, 2026, to close at $410.04 on January 28, 2026 [2]. Next Steps - Investors who purchased or acquired Carvana shares and suffered losses are encouraged to contact Bragar Eagel & Squire for more information regarding their rights and potential claims [3]. About Bragar Eagel & Squire, P.C. - Bragar Eagel & Squire, P.C. is a nationally recognized law firm with a focus on representing individual and institutional investors in various types of litigation, including securities and consumer protection [4].

Core Viewpoint - Analysts project that Carvana (CVNA) will report quarterly earnings of $1.10 per share, reflecting a 96.4% year-over-year increase, with revenues expected to reach $5.19 billion, a 46.3% increase from the same quarter last year [1]. Earnings Projections - The consensus EPS estimate has been adjusted upward by 0.6% over the past 30 days, indicating a reassessment by analysts [1][2]. - Changes in earnings projections are crucial for predicting investor reactions and short-term stock price movements [2]. Revenue Estimates - Analysts estimate 'Sales and operating revenues - Retail vehicle sales, net' to be $3.80 billion, a 48.9% increase from the prior-year quarter [4]. - 'Sales and operating revenues - Other sales and revenues' is projected at $434.07 million, reflecting a 36.9% increase from the previous year [4]. - 'Sales and operating revenues - Wholesale sales and revenues' is expected to reach $945.49 million, a 39.5% increase year-over-year [5]. Unit Sales and Profit Metrics - 'Unit sales - Retail vehicle unit sales' are forecasted to be 157,216, compared to 114,379 in the same quarter last year [6]. - 'Per retail unit gross profit - Total' is expected to be $6,780.51, up from $6,671.00 in the same quarter last year [5]. - 'Per retail unit gross profit - Retail vehicle' is projected at $3,198.55, slightly down from $3,226.00 year-over-year [6]. Additional Revenue Insights - 'Per unit revenue - Wholesale vehicles' is estimated at $10,326.34, compared to $9,371.00 in the same quarter last year [7]. - 'Per unit revenue - Retail vehicles' is expected to reach $24,019.17, up from $22,312.00 in the previous year [8]. - 'Unit sales - Wholesale vehicle unit sales' are projected at 67,233, compared to 48,770 in the same quarter last year [8]. Market Metrics - The estimated 'Markets at end of period (metropolitan statistical areas)' remains at 316, unchanged from the previous year [9]. - The average prediction for 'Per retail unit gross profit - Wholesale' is $586.51, down from $674.00 year-over-year [9]. - Carvana shares have decreased by 20.6% in the past month, contrasting with a -0.3% change in the Zacks S&P 500 composite [9].

Core Viewpoint - Block & Leviton is investigating Carvana Co. for potential securities law violations following a report alleging that the company's profitability is based on undisclosed related-party transactions [1][2][4] Group 1: Investigation Details - Carvana's shares fell over 20% on January 28 after Gotham City Research reported that the company's earnings were subsidized by related-party transactions with DriveTime and Bridgecrest [2] - The report claims that DriveTime incurred over $1 billion in cash losses while leveraging up to 20x to 40x EBITDA to support Carvana's earnings [2] - Bridgecrest reportedly marked down billions in loans as Carvana recognized gains on loan sales [2] Group 2: Eligibility and Actions - Investors who purchased Carvana common stock and experienced a decline in share value may be eligible to recover losses, regardless of whether they sold their investment [3] - Block & Leviton is prepared to file actions to recover losses on behalf of affected investors [4] Group 3: Whistleblower Information - Individuals with non-public information about Carvana are encouraged to assist in the investigation or report to the SEC under the whistleblower program, potentially receiving rewards of up to 30% of any successful recovery [6]