Carvana (CVNA) Pulling Ahead of the Pack, PT Raised as Jefferies Sees 30% Upside to '23 Consensus

Jefferies analyst John Colantuoni raised the price target on Carvana (NYSE: CVNA) to $375.00 (from $350.00) while maintaining a Buy rating after the analyst performed a cohort analysis, which supported a model of 52% 3-year sales CAGR and leading to 30% upside to 2023 consensus.

The analyst stated "We estimate 52% 3-year sales CAGR and 30% upside to 2023 VisibleAlpha consensus, assuming market growth steps down over time at a pace consistent with historical cohorts. Our revised analysis now incorporates more conservative assumptions for growth in year two for future cohorts to account for larger year one market penetration, which we observed in 2019/2020 and expect to continue as CVNA enters new markets with expanded consumer awareness. We use our cohort estimates in our Bull case, which implies CVNA's stock price doubles to $520/share despite only a modest 1x increase in the sales multiple. For perspective, 52% sales CAGR represents a substantial moderation in growth from 128%/102% in 2018/2019. As such, we believe CVNA is better positioned to achieve our Bull case
compared to other internet peers".

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