Carvana Co. (CVNA) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Carvana Co.

Updated on October 29, 2026 · accounts published on October 28, 2026

Reading of October 28, 2026: A fast-growing business at record margins after years of thin or negative ones

Carvana trades at a P/E of 27.4× over the last 12 months, 53 % above its sector median, as revenue grows 49 % and margins sit near a 12-year high.

• Is Carvana expensive or cheap? Carvana's P/E of 27.4× is 53 % above the sector median of 17.9×, and its EV/sales is more than double its decade average.
• How is the business doing? Revenue grew 49 % over the last 12 months, and fiscal 2025 brought a 9.3 % operating margin, the highest in 12 years.
• How strong is the balance sheet? Net debt was $4.67 per share in fiscal 2025, 7.9 % of the share price, and the Altman Z of 8.5 sits deep in the safe zone.
• Can the balance sheet withstand a recession? Carvana passes the liquidity tests for a cyclical, but its five-year ROIC averages −8.4 %, against a healthy level of 12 %.
• What to expect from the next earnings? Analysts expect EPS of $0.37 for the next quarter, due February 25, 2027, after Carvana missed estimates by 12 % on October 28.

Is Carvana expensive or cheap?

Over the last 12 months Carvana trades at a P/E of 27.4×, 53 % above the 17.9× median of 209 companies in its sector. Against its own history the P/E looks low, since its three-year average is 57.5×, but in cyclical businesses a P/E well below average often signals peak earnings, the trap Peter Lynch warned about. Sales multiples smooth out the cycle and point the other way: EV/sales of 4.6× in fiscal 2025 is more than double its 2.2× decade average. The free cash flow yield over the last 12 months is just 1.9 %. The stock sits 38 % below its 52-week high of $95.69.

How is the business doing?

Carvana is growing fast and has turned that growth into profit. Revenue rose 49 % over the last 12 months and EPS jumped 431 %, with an operating margin of 8.7 % and a net margin of 6.2 %. The contrast with its past is stark: the operating margin averaged −10.6 % across fiscal 2014-2025, and fiscal 2025's 9.3 % is the best of those 12 years. ROE of 43.9 % over the last 12 months is high, yet ROIC topped 10 % in only one of the last ten fiscal years, so the record of strong returns is still very short.

How strong is the balance sheet?

Carvana carries debt, but it is small relative to what the market values the company at. Net debt was $4.67 per share in fiscal 2025 ($8.76 of debt less $4.09 of cash), equal to 7.9 % of the current price. Debt-to-equity stands at 1.29 over the last 12 months, a meaningful level, while a current ratio of 4.05 means short-term assets cover short-term liabilities four times over. The Altman Z-score of 8.5 is far above the 2.99 safe-zone line, and a Piotroski score of 7 out of 9 shows solid financial health on most of its tests.

Can the balance sheet withstand a recession?

In consumer cyclicals, demand can fall sharply in a downturn, so the useful checks are liquidity, inventory discipline and returns across a whole cycle. Carvana does well on the first two: a current ratio of 4.05 clears the 1.5 bar, and inventory turned 6.7× in fiscal 2025, above the healthy 4× and its 6.3× five-year average. The cycle-wide numbers are weaker. The operating margin averaged 0.8 % over fiscal 2021-2025, far short of the 8 % threshold, and ROIC averaged −8.4 %. Liquidity looks ready for a recession; profitability over a full cycle is not yet proven.

What to expect from the next earnings?

The latest report, on October 28, 2026, showed EPS of $0.39 against $0.44 expected, an 11.6 % miss, and Carvana has beaten estimates in only 4 of its last 8 quarters. For the next quarter analysts expect $0.37. Over the last 30 days the 2026 EPS consensus barely moved, from $1.62 to $1.61 among 9 analysts, while the 2026 revenue estimate rose 0.6 %. Analysts are split: of 46 covering the company, 21 rate it a buy, 22 a hold and 2 a sell. The next report is due February 25, 2027.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.