What Is The Best Case For Carvana Stock?

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Carvana (CVNA) stock lost 3.5% in the year to October 30, 2026, while the S&P 500 returned 11.3%. The online car retailer kept growing all the same, posting a 42.4% third-quarter revenue increase from a year earlier. During an October 28 call, management restated a goal for a far larger business, and reaching that scale is the best case for the stock. So what is Carvana building toward, and how far along is it?

Carvana Is Aiming For Three Million Cars A Year

Management’s goal is a business that sells 3 million cars a year. The company pairs that target with a profit goal of a 13.5% adjusted EBITDA margin, its own performance measure.

Carvana currently operates at a run rate of 870,000 cars a year, double what it was two years ago, management said. The goal is about 3.4 times that current pace, so most of the distance is still ahead.

Carvana crossed a new milestone in the third quarter of 2026. The company sold 217,385 cars to retail customers, a 39% increase from a year earlier. It was the first quarter the company both sold and produced more than 200,000 cars.

How Big Could Carvana Get?

Management’s own figures suggest Carvana has plenty of room to grow. Even at today’s pace, the company holds just over 2% of the used car market. Management describes the wider auto retail industry as flat.

Carvana’s sales already rival those of the big dealer groups. The company generated $27.5 billion in revenue over its latest four quarters, putting it level with AutoNation. Carvana’s revenue grew 50.3% over that time, while AutoNation’s fell 1.8% over its own latest four quarters.

Carvana stock closed on October 30, 2026, down 28.6% from its highest close of the past year, $95.69 on January 22. At 28.9 times trailing earnings, against 22.6 for the S&P 500, the price appears to assume Carvana keeps growing faster than the market.

What Has To Go Right For Carvana?

Carvana has to produce more cars ready to sell. During the October 28 call, management said the company’s growth is limited by its ability to scale its supply chain. It added that the number of cars on its website ready to buy is growing much more slowly than its sales, and that to scale production, the company is investing in people, processes and systems at its reconditioning centers.

Profit on each dollar of sales also has to rise. Carvana posted an 8.9% operating margin in its latest quarter, down from 9.8% in the third quarter of 2025. Management said its margin goal maps to an operating margin of 12.5%, describing the path there as extremely clear.

The call also touched on competition, and management said it had not seen any competitor have a notable impact on its results. Management expects retail units sold to rise in the fourth quarter of 2026 from the third quarter, as long as the environment remains stable.

Retail units sold are the measure to watch when Carvana releases its next report, expected in February 2027.

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