Citizens reaffirmed its Market Outperform rating for Carvana Co. (NYSE: CVNA) and maintained a $460.00 price target, saying the most recent quarter represents a turning point for the company’s bull case.
In its assessment, Citizens noted that Carvana now has clearer visibility to a medium-term goal of 13.5% EBITDA margins. The bank highlighted two drivers behind the margin narrative: fixed-cost leverage and variable-cost improvements that the company is transferring to customers.
Citizens quantified one element of that leverage, saying Carvana expects fixed-cost efficiencies to contribute roughly 2 percentage points to EBITDA margins. Carvana reported EBITDA margins of 11.0% in 2025, and the broker framed the delta to the 13.5% target as reachable given the stated operating dynamics.
On variable costs, the company has started sharing savings with buyers. The firm has passed along $60 in shipping savings and trimmed interest rates by one percentage point as part of actions to return some of the gains from lower variable costs to customers.
Citizens also expects Carvana to widen its price advantage over peers as the company leverages a cost advantage that should grow with scale. The firm anticipates that sustained price competitiveness will translate into additional market share gains for the online used-vehicle retailer.
Earnings and analyst responses
Carvana’s fourth-quarter 2025 results showed a substantial increase in used retail unit volumes, rising by more than 40%. That compares with peers that recorded a roughly 4% decline in used retail units over the same period.
Despite the strong volume trajectory, several broker notes highlighted differing priorities and valuation views across the sell-side.
- RBC Capital flagged a miss in gross profit per unit, saying Carvana prioritized volume expansion over per-unit profitability. RBC reduced its price target to $440 from $500.
- DA Davidson cut its price target to $320 from $470 and kept a Neutral rating, citing valuation concerns.
- JPMorgan reiterated an Overweight rating and left its $510 price target intact, pointing to Carvana’s competitive position in the online used-vehicle market.
- BTIG maintained a Buy rating with a $535 price target, even while noting concerns tied to Carvana’s relationship with DriveTime, a company connected to the CEO’s family.
At the same time, Carvana continues to face ongoing legal challenges, a source of investor unease ahead of its forthcoming earnings report. Collectively, these developments reflect mixed sentiment among analysts and investors about Carvana’s current market position and prospects.
What this means for investors
Citizens’ outlook centers on margin expansion through fixed-cost leverage and the company’s willingness to use variable-cost savings to bolster competitiveness. Other analysts’ moves show divergent reactions: some reward scale-driven competitive positioning with higher targets, while others reset expectations after a profit-per-unit shortfall or flag valuation and governance-related concerns.
For market participants, the picture is therefore balanced between evidence of operational progress and questions around profitability per unit, legal exposure, and how those factors will affect valuation.