Carvana (CVNA) PT Raised 12% to $90 at Citi After Earnings

Citi analyst Nicholas Jones raised the price target on Carvana (NYSE: CVNA) to $90.00 (from $80.00) while maintaining a Buy rating after the company reported 1Q19 revenue and unit sales above expectations. Adjusted EBITDA came in slightly below consensus expectations but management increased both retail unit sales and revenue guidance for 2019 and maintained its adjusted EBITDA margin guidance. The company increased its vehicles sourced from consumers to 14% from 6% in 1Q18 (17% in 4Q18).

The analyst believes the company's "objective is to have 40 IRCs that can process 2m units annually (5% market share). In March of 1Q, CVNA performed its first securitization; which over time and with more frequency can enable CVNA to increase monetization of its financing platform – we believe the securitization should quell the concerns bears have around CVNA’s financing business. We view tonight’s results as a positive for CVNA and look to Citi’s April Carvana tracker to monitor CVNA’s unit sales using Citi’s Innovation Lab".

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