New York, Feb 19, 2026, 10:08 EST — Regular session.
- Carvana dropped roughly 3% at the open in New York, extending the stock’s steep tumble after earnings.
- Profit took a hit from higher reconditioning and depreciation costs. The company flagged that some of these cost pressures are sticking around in Q1.
- Friday’s U.S. PCE inflation numbers are in focus, with investors searching for signals on rates and what’s next for auto loan demand.
Carvana Co (CVNA) shares slipped 3.3% to $349.65 Thursday morning, after a volatile start. The stock plunged to $297.33 earlier in the session, falling almost 18%, but pared back from those lows.
Carvana shares slid late Wednesday after the company’s fourth-quarter numbers landed. Expenses surged to roughly $2.16 billion—elevated inspection, repair, and detailing costs played a role, and so did higher depreciation in retail. That put pressure on a stock that’s already more than doubled in 2025 and made it into the S&P 500. Stripping out certain items, Carvana posted earnings of $1.06 per share, missing the LSEG consensus by four cents. Revenue, though, surged 58% to $5.6 billion. Net income hit $951 million, with tax accounting providing a lift. CFO Mark Jenkins said the cost pressures would likely extend into Q1. He also again pushed back on Gotham City Research’s claims about inflated profits and related-party dealings.
This is suddenly crucial for Carvana, with the stock riding on whether the company can keep growth steady—without unexpected costs slashing profit per vehicle. Investors are left untangling what portion of the recent earnings boost comes from actual business performance, and what’s just accounting quirks.
Carvana reported a record 163,522 retail units sold for the quarter—its main sales metric—and 596,641 for the full year. Adjusted EBITDA landed at $511 million in Q4. That metric, which excludes interest, taxes, depreciation and various other items, is Carvana’s internal gauge for operating results. CEO Ernie Garcia described Carvana as “still very small” compared to its potential. Looking ahead, the company’s guiding for “significant growth” in both retail unit sales and adjusted EBITDA in 2026. For Q1, management is projecting a sequential uptick in both figures, provided conditions hold steady. Carvana Investors
The filing lays out just how hefty the tax impact is here: Carvana slashed $2.2 billion off its deferred tax assets by releasing a valuation allowance, and then booked a matching $2.2 billion hit tied to its tax receivable agreement. That valuation allowance, basically a reserve against tax assets the company isn’t sure it can actually use, can move earnings significantly without touching cash. In its annual report, management’s call on the allowance showed up as a critical audit matter.
In auto retail action, CarMax edged up 0.8% early. AutoNation and Lithia Motors both slipped roughly 1%. That left Carvana standing out—traders zeroed in on its cost structure, not the wider auto retail scene.
Wholesale used-vehicle prices barely budged on a seasonally adjusted basis through the first half of February, but Cox Automotive’s Manheim Used Vehicle Value Index still registered a 2.9% gain year over year. “Tax refund season is now in full swing,” said Jonathan Gregory, senior manager of economic and industry insights at Cox, highlighting early demand as spring selling heats up. For Carvana, stronger wholesale prices can bolster what it charges at retail, though pricier replacement inventory can squeeze margins if those costs aren’t passed along fast enough. Cox Automotive Inc.
The risk scenario is clear enough: should reconditioning expenses remain elevated and depreciation start hitting the inventory, per-unit margins could shrink quickly. Shares have a history of sharp moves on headlines; renewed questions about accounting or disclosures might keep volatility high.
Friday brings the U.S. Personal Income and Outlays numbers — due Feb. 20 — and with them, the PCE price index. That’s the inflation gauge on every rate-watcher’s radar. As for CVNA, those figures cut right to the chase: they shape financing appetite and what it costs to get cars from point A to B through its platform.
