NEW YORK, Feb 21, 2026, 13:48 EST — Market closed.
Carvana Co’s shares closed Friday up 1.2% at $336.62, giving the stock a small breather after a sharp post-earnings swing earlier in the week. (Zacks)
Why it matters now: traders are back to watching what Carvana makes per car, not just how many it sells. Gross profit per unit — a rough gauge of profit per vehicle sold — came in at $6,427 in the fourth quarter, short of expectations, and the company warned vehicle reconditioning costs could stay elevated in the first quarter. It also forecast “significant growth” in vehicle sales volume and adjusted EBITDA, a commonly used cash-flow proxy, but held back specific targets; Wedbush and JPMorgan cut price targets to $425 and $490. (Investopedia)
The setup is touchy. Carvana fell about 8% on Thursday, and the stock still carries sizable short positioning — bets the price will fall — with about 14.84 million shares sold short, or roughly 10.7% of free float as of Feb. 17, Ortex data showed. Stephens analyst Jeff Lick called the drop “a potential opportunity,” while warning that premium-valued stocks can react hard even to modest disappointments. (Reuters)
Carvana’s quarterly report landed awkwardly. The company missed Wall Street estimates for fourth-quarter profit after higher expenses tied to inspection, repair and detailing across several production sites, along with higher retail depreciation rates, and the shares slid 15% after the bell on Wednesday, Reuters reported. “We do expect those cost dynamics to play out in Q1,” CFO Mark Jenkins said on the earnings call, and he pushed back on renewed claims from short seller Gotham City Research, adding: “We don’t sell loans to related parties.” (Reuters)
Investors now have to decide whether that cost spike was a messy patch at a handful of locations or something more stubborn. If it lingers, the next leg of the story is not about demand — it’s about execution.
Regulators are not the only issue. Carvana’s stock has been a retail-trader magnet for years, and heavy two-way positioning can exaggerate moves when headlines land.
A new filing adds texture, and some potential land mines. In its annual report filed Feb. 18, Carvana said used-vehicle sales typically peak late in the first quarter as federal tax refunds arrive and noted its results may become more seasonal over time. The filing also described DriveTime as a related party because of the Garcia family’s control, said some arrangements “cannot be assumed to have been negotiated at arm’s length,” and disclosed that it sold no finance receivables to DriveTime from 2017 through 2025; it listed CarMax among traditional used-car dealers and named online players including Amazon and eBay Motors as competitors. (SEC)
But the simplest downside case is still the same: reconditioning and depreciation stay higher than expected, first-quarter profit assumptions drift lower, and the stock gives back more of its multi-month run.
Rates matter too. When borrowing costs pinch, used-car affordability can turn quickly, and lenders tend to tighten exactly when investors start talking themselves into “easy comps.”
For now, the market is left with a narrow question: can Carvana show early in 2026 that volume growth does not have to come at the expense of per-vehicle profit?
Carvana said the replay of its Feb. 18 earnings call will be available until Wednesday, Feb. 25. When U.S. trading resumes on Monday, Feb. 23, investors will be looking for follow-through on the cost debate — and any fresh analyst resets. (Carvana)
