Carvana Co

Carvana shares are headed for a double-digit decline on the week as a federal probe targeting billionaire Mark Walter fuels uncertainty over his minority stake in the company. Federal prosecutors and the SEC have opened an investigation into Walter and companies tied to his financial empire, focusing on whether certain financial relationships were hidden while more than $20 billion moved through insurance firms under his control, according to CNBC. Walter indirectly controls CVAN Holdings LLC, which owned 8% of Carvana's Class B common stock as of March 10, and has agreed to sell the LA Lakers for $12.5 billion amid the probe. Carvana's March proxy statement also disclosed that in June 2025, a private consumer products company granted Carvana a warrant valued at $1.5 million as of year-end 2025, with Walter holding a substantial ownership interest in the warrant issuer. Carvana director Ira J. Platt disclosed the sale of 30,000 shares at prices around $74, bringing in approximately $2.1 million through the exercise of options scheduled to expire in 2027.

Meta Platforms shares tumbled almost 10% in extended trading after the company reported earnings per share of $6.18, missing analysts' estimates by $1.04 per share, and forecast third-quarter revenue between $61 billion and $64 billion, the lower end of which is lighter than the $63.15 billion estimated by analysts. Microsoft shares rose about 3% after quarterly revenue of $90.01 billion topped estimates of $87.62 billion, with Azure growth of 43% at constant currency beating StreetAccount estimates of 40.2% growth, and the company said Azure revenue in the 2026 fiscal year surpassed $100 billion for the first time. Starbucks shares jumped 5% after the coffee retailer raised its full-year outlook and reported same-store sales growth of 7.9%, with adjusted earnings of 85 cents per share beating estimates of 66 cents per share and revenue of $9.32 billion exceeding the $9.16 billion expected. Carvana shares tumbled 14% after the online used-car retailer's full-year earnings guidance of between $2.7 billion and $3 billion missed Wall Street expectations, which included forecasts of $3 billion to $3.2 billion from Deutsche Bank and $4.45 billion from Morgan Stanley. Other notable movers included Fortinet soaring more than 11% on strong billings, Lam Research jumping more than 6% on better-than-expected results, and Qualcomm falling more than 5% on mixed quarterly results.

Robinhood, Arm Holdings, and Carvana saw their stocks move in after-hours trading following their latest earnings reports. Robinhood shares edged lower despite topping Wall Street estimates and posting a double-digit revenue gain, with crypto weighing on the company as Bitcoin fell nearly 50% over the past 12 months. Arm Holdings came under pressure even though quarterly earnings beat analyst estimates, as investors were underwhelmed by the outlook and concerns lingered around smartphone demand, though data center royalties more than doubled and demand for its new AI chip continued to build. Carvana stock sank after the online auto retailer reported better-than-expected revenue and slightly above-consensus adjusted EBITDA, but its full-year adjusted EBITDA guidance disappointed the street.

US stock futures are pointing slightly higher this morning as investors weigh softer US inflation against rising global interest rate worries. The US 10-year Treasury yield has eased to about 4.52% after cooler price data, helping reduce pressure on borrowing costs for households and companies. Import prices rose 0.3% in June instead of falling, a reminder that the cost of goods coming into the country is still pushing prices up. With the Federal Reserve expected to keep rates on hold today, the big question is whether rate-sensitive sectors such as housing, banks and real estate can handle both lingering inflation and higher long-term borrowing costs. Among top movers, Global Payments jumped 5.85% after a Morgan Stanley upgrade and higher price target, Alibaba Group Holding gained 4.67% as investors focused on its AI partnerships and new model preview, and Credo Technology Group Holding rose 4.63% following a Barclays price target increase ahead of Q2 earnings. On the losing side, Bloom Energy fell 8.33% as traders reacted to recent weakness and commentary on project delays, Guardant Health declined 5.00% after a recent price target raise failed to support the stock, and Carvana declined 4.75%. US trading is set to be earnings heavy, with major reports spanning tech, autos, housing, financials and transport, including Alphabet on Wednesday, Tesla on Wednesday, AT&T and T-Mobile US on Wednesday and Thursday, D.R. Horton and PulteGroup on Tuesday and Wednesday, and CSX, Norfolk Southern and Union Pacific through Thursday.

Shares of Carvana, Revolve, and Match Group fell in afternoon trading after President Trump declared the Iran ceasefire over and vowed further strikes, sending oil prices and bond yields higher in a risk-off rotation. Carvana dropped 4.2%, Revolve fell 4.1%, and Match Group declined 3.3%. Consumer internet companies are long-duration growth stocks whose valuations are sensitive to rising discount rates when bond yields climb, and their business models face cyclical pressure from higher energy costs and cautious advertising budgets. Carvana's stock has been extremely volatile, with 37 moves greater than 5% over the past year, and is now trading 32.1% below its 52-week high of $95.69 from January 2026.

Used car marketplace startup Bidbus has raised new capital to expand its digital platform, introducing a direct competitive challenge to Carvana's online used car service model. Bidbus plans to scale a dealer bidding model for used car inventory, targeting more transparent pricing. Carvana, which closed at $67.49, is down 15.7% year to date and down 2.4% over the past year. As Bidbus ramps its platform, investors may monitor whether Carvana's pricing power, customer acquisition costs, and inventory access come under pressure.

CarMax reported first-quarter fiscal 2027 net revenues of $8.01 billion, a 6.2% year-over-year increase that exceeded expectations, while total units rose 3.3% to 392,357. Earnings per share declined to $1.31 from $1.38 as gross profit fell 4.4%, with retail gross profit per used unit dropping $230 to $2,177 due to intentional pricing investments. The company raised average selling prices to $27,288 and reduced SG&A by 3.7%, targeting $200 million in exit-rate savings by fiscal 2027. New CEO Keith Barr introduced a four-pillar strategy and added a $500 million term loan while pausing buybacks. CarMax Auto Finance income was $140.2 million and credit losses improved.

Carvana's retail unit growth appears to have slowed in June, but Jefferies analysts maintained their Buy rating and $95 price target on the stock. Based on web-scraped data, Jefferies estimates second-quarter retail unit growth of 33% year over year, about 2% below Wall Street consensus of 37%, which would mark Carvana's first retail unit miss in 10 quarters. The firm lowered its second-quarter unit and EBITDA estimates by roughly 1% but left second-half 2026 and beyond forecasts unchanged, attributing the softer growth to temporary constraints from expansion and infrastructure build-out. Inventory levels continued to rise at a mid- to high-20% annual pace, while average selling prices increased by a mid-single-digit to high-single-digit percentage year over year each week of the quarter, supported by lower financing rates.

Online retail stocks tracked by StockStory delivered a strong first quarter, with aggregate revenues beating analyst consensus estimates by 2.3% and next-quarter revenue guidance coming in 4% above expectations. Carvana led the group with a 52% year-on-year revenue surge to $6.43 billion, topping estimates by 6%, yet its stock fell 15.7% after the report. Amazon posted $181.5 billion in revenue, up 16.6% and 2.4% above estimates, but shares dropped 7.6%. Coupang, the weakest performer against estimates, reported $8.50 billion in revenue, missing by 0.6%, and its stock declined 13.5%. Revolve and Wayfair also beat revenue expectations, but only Wayfair's stock rose, gaining 21.8%, while Revolve fell 6.6%. Despite the positive earnings surprises, the average stock in the group is down 5.4% since reporting.

Wall Street closed lower on Wednesday after the Federal Reserve held interest rates steady at 3.50-3.75% and nine of 19 policymakers projected at least one rate increase by the end of 2026. The Dow Jones Industrial Average fell 507.12 points, or 1%, to 51,492.55, while the S&P 500 lost 1.2% to 7,420.10 and the Nasdaq Composite declined 1.3% to 26,021.66. New Fed Chairman Kevin Warsh dropped forward guidance and said future decisions will be data-dependent, while also announcing a comprehensive review of communications, the balance sheet, and the monetary policy framework. In economic data, retail sales rose 0.9% in May, exceeding the 0.4% consensus estimate, and pending home sales increased 3.8%, well above the expected 1% gain.

S&P 500 futures edged about 0.1% higher Thursday morning as investors weighed a 1.9% rise in May import prices, including a 12.5% surge in fuel and lubricants, against expectations the Federal Reserve will hold rates steady at 3.50% to 3.75%. Export prices climbed 1.3%, marking a sixth consecutive monthly increase. Among top movers, Moderna jumped 11.55% on upbeat FDA briefing documents, Robinhood Markets gained 8.78% after analysts raised price targets following a workforce reduction, and GE Vernova rose 6.77% after Bernstein initiated coverage with an Outperform rating. On the losing side, Carvana fell 10.25% after RBC Capital cut its price target, EchoStar declined 7.66%, and AppLovin dropped 6.93%. Earnings from Accenture and Kroger are due Thursday, alongside the Fed’s June policy communication.

Shares of online retailers Carvana and Chewy declined sharply after the Federal Reserve voted unanimously to hold its benchmark rate at 3.5% to 3.75% and its dot plot pointed toward a potential hike rather than a cut. Carvana fell 9.5% and Chewy dropped 4% as the sector, which increasingly relies on buy-now-pay-later and consumer credit, faces higher funding costs when short-end rates are expected to rise. A stronger dollar also pressured international revenue for e-commerce platforms. Carvana is now trading 33.8% below its 52-week high of $95.69 from January 2026.