Why Is Carvana (CVNA) Up 3.1% Since Last Earnings Report?

It has been about a month since the last earnings report for Carvana (CVNA). Shares have added about 3.1% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Carvana due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Carvana Q3 Earnings Beat EstimatesCarvana reported third-quarter earnings of 64 cents per share, which breezed past the Zacks Consensus Estimate and the year-ago quarter earnings of 23 cents. Revenues of $3.66 billion beat the Zacks Consensus Estimate of $3.47 billion and rose 32% year over year.Key HighlightsTotal gross profit amounted to $807 million, up 67.4% year over year. Total gross profit per unit (GPU) was $7,427, rising from $5,952 in the year-ago period and exceeding our estimate of $6,880. SG&A expenses were $469 million, up 8.3% year over year. Carvana achieved an adjusted EBITDA of $429 million for the third quarter of 2024. Adjusted EBITDA margin in the quarter under review was 11.7%, up from 5.3% in the third quarter of 2023.Segmental PerformanceRetail vehicle sales totaled $2.54 billion in the quarter, rising 30.5% year over year and topping our estimate of $2.52 billion on the back of higher-than-expected sales volume. During the reported quarter, the number of vehicles sold to retail customers rose 34.2% to 108,651 from the prior-year period and exceeded our estimate of 105,518 units. Gross profit amounted to $380 million, up 74.3% year over year. Gross profit per unit came in at $3,497, significantly up from $2,692 generated in the year-ago period as well as ahead of our expectations of $3,011.In the third quarter, wholesale vehicle sales totaled $786 million, up 28.9% year over year. Sales breezed past our estimate of $475 million amid higher-than-expected unit sales. During the reported quarter, the number of vehicles sold to wholesale customers soared 38.2% to 56,487 from the prior-year period and exceeded our estimate of 49,214 units. Gross profit came in at $101 million, rocketing 102% from the corresponding quarter of 2023. GPU came in at $930, up 50.5% year over year and above our estimate of $633.In the period under consideration, other sales and revenues rose 52.3% year over year to $326 million and beat our forecast of $214 million. Gross profit was $326 million, up 52.3% year over year. GPU came in at $3,000, up 13.6% year over year. However, it missed our estimate of $3,235.Financial PositionCarvana had cash and cash equivalents of $871 million as of Sept. 30, 2024, compared with $530 million as of Dec. 31, 2023. Long-term debt was $5.43 billion as of Sept. 30, 2024, compared with $5.41 billion recorded on Dec. 31, 2023.OutlookCarvana expects a sequential increase in year-over-year growth of retail unit sales in the fourth quarter of 2024. For full-year 2024, it expects adjusted EBITDA to be significantly above the high end of the prior guided range of $1-$1.2 billion.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed an upward trend in fresh estimates.The consensus estimate has shifted 331.03% due to these changes.VGM ScoresCurrently, Carvana has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Carvana has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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