2024-07-10 17:09:00

Carvana (NYSE:CVNA) saw a 4% increase in shares after being upgraded to Buy from Hold at Needham, with a new price target of $160 per share. Needham believes Carvana has the potential to boost unit sales and market share through its digital-first customer experience and under-utilized physical footprint.

The firm predicts that Carvana is on track to become a profitable growth story, with rising retail unit sales and improved gross profit per unit. Needham believes the current consensus on retail unit estimates has hit bottom and does not yet reflect the expected recovery.

Needham sees potential upside from Carvana’s focus on unit growth, optimizations at acquired Carvana IRCs and Adesa locations, and the benefits of a more stable balance sheet.