Carvana is Monday's IBD Stock Of The Day, as the auto retailer rebounded from a key support level, offering investors the possibility to add shares. The stock has soared more than 120% since hitting recent lows in early April.
On May 7, Carvana, an online platform for buying and selling cars, reported better-than-expected first-quarter profit and sales. It forecast record highs for current-quarter unit sales and adjusted EBITDA. The company also announced a target of selling 3 million retail vehicles per year at an adjusted EBITDA margin of 13.5% within 5-10 years. For the quarter, Carvana sold 133,898 retail units, for a new quarterly record. Its Q1 revenue grew 38%, while earnings soared to $1.51 per-share from 23 cents-per-share a year ago.
In the conference call with analysts, CEO Ernie Garcia saw limited impact from President Donald Trump's auto tariff policies.
"I think when tariffs were first announced, we saw a small pull forward of demand and we reacted accordingly," Garcia said. "We pulled some levers to try to keep sales on our plan. And despite that little increase in demand and then we saw probably a little bit of a trough thereafter and it feels like it's stabilized since."
"Overall our expectations remain the same. So I don't think we have too much that's interesting there, but that's how we've been reacting," he added.
Since the Q1 report, Carvana stock has jumped 28%.
Investors can keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Carvana Stock Performance
CVNA stock surged 5.6% to 337.10 during Monday's stock market action. Carvana stock is now extended above a buy point from a cup base with a buy zone that ran to 307.48.
The stock is currently rebounding from a three-week consolidation — passing a June 24 high of 328.20 as it rebounds from the quick test of short-term support, according to MarketSurge analysis.
This move could be used as an add-on or alternative entry for investors. Carvana stock has soared 120% since hitting a recent low of 148.25 on April 7.
Meanwhile, AutoNation declined about 0.2% in Monday's stock market and Group 1 Automotive fell 0.5%.
America's Car-Mart, which operates more than 150 used-car dealerships, gained 0.6% on Monday. CarMax edged up about 1% in stock market trade.
CVNA shares entered Monday's stock market up more than 60% in 2025. Meanwhile, the 22 stocks in the IBD-tracked Retail/Wholesale-Automobile industry have collectively gained 8% in this year's stock market.
Average True Range Within Guidelines
Carvana stock has a 21-day average true range of 4.39%. The ATR metric is available on IBD's MarketSurge charting tool and gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
The S&P 500 and Nasdaq are now in a power trend. Investors can buy stocks with ATRs up to 8%, though they should be wary of being too concentrated in high-octane names.
CVNA shares have a strong 98 Composite Rating out of a best-possible 99. Carvana stock also has a 97 Relative Strength Rating and an 82 EPS Rating.
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