Carvana Co (NYSE: CVNA) has been one of the quintessential millionaire makers over the past two years – but a JPMorgan analyst continues to see significant further upside in its share price in 2025.
Rajat Gupta raised his price target on CVNA this morning to $350 which indicates potential for another 40% upside from current levels.
Positive revisions followed by multiple expansions will help Carvana stock hit new highs this year, he told clients in a research note on Friday.
Financial strength supports buying Carvana stock
JPM is super bullish on Carvana shares primarily because the company’s financial health remains strong.
The online used car retailer earned 64 cents a share on $3.65 billion in revenue in its latest reported quarter. Analysts, in comparison, were at 25 cents per share only and $3.45 billion in revenue.
More importantly, the New York-listed firm expressed optimism at the time that its full-year adjusted EBITDA is on track to printing well above its previous target of up to $1.2 billion.
CVNA is now scheduled to report its Q4 earnings on February 19th. The consensus is for it to earn 25 cents a share versus a dollar of loss a year ago.
Note that Carvana stock does not currently pay a dividend.
CVNA has ample liquidity on the balance sheet
Gupta is bullish on Carvana stock also because the online used car retailer recently signed a deal with Ally Bank and Ally Financial to sell automotive finance receivables worth up to $4.0 billion.
The agreement means a significant influx of capital for CVNA that will boost its liquidity and help its growth initiatives.
The company based out of Tempe, AZ ended its third financial quarter with about $1.1 billion in total liquidity. This includes cash, cash equivalents, and available borrowing under a revolving credit facility.
Note that Carvana shares are still trading significantly below their pandemic times high of $361.
Carvana technicals point upwards too
Investors should also know that JPM is not the only investment firm that’s positive on Carvana.
Others including Bank of America, Citi, Needham, and RBC have recently reiterated their buy ratings on shares of the online used car retailer – citing the potential for continued increase in retail unit sales.
Analysts are bullish on Carvana stock also because they expect the company to quickly grow its inventory and meet the rapidly growing consumer demand.
From a technical perspective, shares of CVNA are worth buying at the time of writing because they have recently broken above key resistance at the $234 level as shown in the chart below.
All in all, the setup looks strong for the NYSE-listed firm to rally further if its financial results come in above Street estimates on February 19th.
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