Overview
- Carvana shares fell about 8% Monday after a Temple 8 Research note highlighted falling profit per car and a lower EBITDA margin, leaving the stock down roughly 35% for the year.
- The report also questioned earnings quality, pointing to an estimated $685 million one-time, non-cash tax benefit that padded reported profit.
- Temple 8 warned that tighter auto lending could hurt results as Ally Financial reduced loan purchase commitments and focused on higher-quality borrowers.
- Despite the selloff, Bank of America kept a Buy rating with a $400 price target, citing 2025 revenue of $20.32 billion and a 43% jump in retail units sold.
- Legal overhang persists after Gotham City Research alleged major earnings overstatement for 2023–24, while a 5‑for‑1 stock split faces a shareholder vote on May 5.