Carvana Wedbush Upgrade Lifts Shares
Carvana Wedbush upgrade raised its 12-month price target to $400 and flagged unit growth and margin expansion, prompting renewed trader interest.
KEY TAKEAWAYS
- Wedbush upgraded Carvana to Outperform and raised its 12-month price target to $400.
- The note forecast Q4 revenue of $5.2 billion and FY 2025 revenue of $19.9 billion.
- Wedbush cited accelerating unit growth and margin expansion as the rationale.
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Wedbush Securities upgraded Carvana (CVNA) to Outperform from Neutral on Nov. 24, 2025, citing stronger management execution, accelerating unit growth, and margin expansion. The firm raised its 12-month price target to $400 from $380, prompting shares to rise more than 7% following the note.
Wedbush Upgrade and Valuation
Wedbush viewed Carvana’s recent roughly 13% share price pullback as excessive and a buying opportunity. The firm values Carvana at about 22 times its 2027 earnings estimate, near the low end of the stock’s two-year trading range. The upgrade reflects confidence in the company’s ability to sustain growth and improve profitability.
Growth and Margin Outlook
Wedbush projects Carvana’s revenue will reach $5.2 billion in the fourth quarter of 2025, up 46.4% year-over-year, and $19.9 billion for the full year, a 45.6% increase. These gains are driven mainly by a 41.4% rise in used-unit sales, supported by sustained unit expansion and improved per-unit economics.
The firm expects Carvana to surpass CarMax in quarterly used-unit volumes by the fourth quarter of 2026, forecasting about 187,000 units compared with CarMax’s 170,000. Wedbush projects Carvana will scale to 3 million annual retail unit sales by 2033, implying a compound annual growth rate of at least 23% through that year.
Adjusted EBITDA margins are forecast to reach 12% by 2027, moving toward management’s longer-term target of 13.5% within five to ten years. Wedbush noted limited concern about credit performance despite Carvana’s expansion into lower-prime and subprime financing.
The firm’s valuation and profit assumptions underpin the higher price target and suggest potential for a re-rating if Carvana meets its volume and margin forecasts.
The near-term test of Wedbush’s outlook will come with Carvana’s fourth-quarter 2025 results and whether unit volumes and revenue align with projections. Progress toward the projected volume lead in late 2026 and the longer-term sales and margin goals will influence future valuation assessments.
