UBS has trimmed its price target for Carvana Co. (NYSE: CVNA) to $485 from $545 while keeping a Buy rating on the online used-vehicle retailer. At the time of UBS’s note, Carvana shares were trading around $334, well below both the bank’s revised target and the consensus analyst high of $550. InvestingPro data cited by analysts places the stock on the Most Undervalued list, implying the shares are trading beneath their Fair Value estimate.
The downgrade to the price objective follows an earnings miss in fourth-quarter 2025, where EBITDA fell short of UBS’s expectations. The firm attributed the shortfall to higher-than-expected costs, calling out reconditioning expense as a key driver of the EBITDA miss. Despite that quarterly setback, Carvana delivered $2.16 billion in EBITDA over the trailing twelve months and currently trades at a 23.2x EBITDA multiple.
UBS characterizes the elevated reconditioning costs as a temporary issue and expects those expenses to improve over the coming year. Because Carvana is coming off a lower starting base, UBS notes retail gross profit per unit and EBITDA per unit may end up flat or slightly lower year-over-year. The bank remains attentive to the company’s longer-term expansion plans, including progress toward its goal of selling 3 million units.
Management publicly responded to a recent short report, denying the claims made in that report. UBS highlighted that the market reaction to the January 2025 short report produced a buying opportunity: shares rallied by more than 60% over roughly a 1.5-month period following the sell-off.
UBS continues to view Carvana as a differentiated online platform that is positioned to take share in the used vehicle market. The firm projects EBITDA growth at a mid-20% compound annual growth rate from now through the end of the decade, underpinning its constructive longer-term view even as it trims near-term valuation expectations.
Additional investor research signals mixed but generally constructive datapoints. InvestingPro Tips highlight that analysts expect sales growth in the current year and anticipate net income expansion—these are two of 14 exclusive tips available to subscribers, supported by a full Pro Research Report that reviews the company’s key investment considerations.
Other broker commentary has been varied. Carvana’s reported fourth-quarter 2025 results showed used retail unit sales rising by more than 40%, while competing sellers experienced a 4% year-over-year decline. RBC Capital pointed to a miss on gross profit per unit, linking the shortfall to Carvana’s strategic emphasis on volume growth achieved by offering more favorable economics to customers; RBC lowered its price target to $440 but retained an Outperform rating.
DA Davidson cut its price target to $320 from $470, citing valuation concerns but left a Neutral rating in place. Citizens Financial kept a Market Outperform stance, indicating the company appears on track to reach a medium-term EBITDA margin target of 13.5%. JPMorgan reiterated an Overweight rating, pointing to Carvana’s competitive position in the online used-vehicle channel.
Investors face a mix of catalyst and uncertainty as the company approaches its next earnings release. Legal challenges and continued scrutiny from short sellers are cited as sources of investor unease ahead of the report. Taken together, analyst views on Carvana’s near-term operating performance and valuation are mixed, even as several firms maintain constructive longer-term expectations.
Summary
UBS cut Carvana’s price target to $485 but held its Buy rating after a Q4 2025 EBITDA miss attributed to higher reconditioning expenses. The firm regards those costs as transient, points to a $2.16 billion trailing-12-month EBITDA figure and expects mid-20% EBITDA CAGR through the end of the decade. Other brokers issued mixed guidance and ratings, reflecting divergent views on profit margins, valuation and growth strategy.