Carvana’s Turnaround Story: Analysts Cautious Despite S&P 500 Inclusion
Carvana Co. (NYSE: CVNA) has staged one of Wall Street's most dramatic recoveries, with shares soaring from near-bankruptcy lows below $4 in late 2022 to an all-time high of $399.77 as of December 5, 2025. The online used-car retailer's inclusion in the S&P 500, effective December 2025, caps a year of record profits and margin expansion.
Despite the euphoria, analysts warn of limited near-term upside. The stock's 95-100% year-to-date rally and 30% monthly gains have left valuations stretched. After-hours trading saw shares spike toward $435-$440 following the S&P 500 announcement, a typical 'index effect' reaction as funds rebalance holdings.
Carvana's fundamentals show genuine improvement—Q3 2025 results revealed strong unit growth, revenue gains, and margin recovery. The company's deleveraging progress has been particularly noteworthy. Yet market veterans recall the stock's volatility and question whether current prices fully reflect execution risks in the competitive used-auto market.
