Ernest Garcia II unloads over $13 million in Carvana shares By Investing.com

In a series of transactions, Ernest Garcia II, a significant shareholder of Carvana Co. (NYSE:), sold a substantial amount of shares in the online car dealer. The total value of the shares disposed of amounted to over $13 million, with prices ranging from $107.09 to $112.38.

The sales, which took place on June 18 and June 20, involved multiple trades where Garcia sold shares at varying prices. On June 18, the weighted average prices of shares sold ranged from $108.03 to $111.65. A couple of days later, on June 20, the transactions were executed at weighted average prices between $106.58 and $112.66.

This divestment comes at a time when Carvana Co.’s stock has been under the watchful eye of investors. Garcia, who has been associated with the company in a significant capacity, executed these sales through a pre-arranged Rule 10b5-1 trading plan, a tool often used by company insiders to sell their shares without facing the accusation of trading on nonpublic information.

The shares sold were Class A Common Stock, and post-transaction, Garcia still holds a substantial number of shares in Carvana Co. directly and indirectly through various trusts and entities. The filing noted that Verde Investments, Inc., wholly owned and controlled by Garcia, continues to hold a significant number of Class A shares. Additionally, trusts for the benefit of Garcia’s family and entities controlled by him hold both Class A and Class B Common Stock as well as Class A Units that are exchangeable for Class A shares under certain conditions.

Investors often keep a close eye on insider transactions as they can provide valuable insights into the company’s prospects and the confidence level of its key stakeholders. The recent transactions by Garcia will likely be no exception as market participants assess the implications for Carvana’s future.

In other recent news, Carvana Co. has reported a record financial performance for the first quarter of 2024, reflecting a significant year-over-year growth. The company’s focus on efficiency and profitability has resulted in a 16% increase in retail units sold, a 42% increase in Gross Profit per Unit, and a record 7.7% Adjusted EBITDA Margin. Moreover, Carvana’s Adjusted EBITDA for Q1 stood at $235 million.

The company’s strategic moves aimed at reducing debt, including the repurchase of approximately 24% of its 2028 Senior Secured Notes and raising $350 million of equity capital, are expected to reduce the company’s debt by $620 million by the end of 2026. In addition to these financial improvements, Carvana’s recent acquisition of ADESA, an automotive auction company, is expected to expand its regional network and potentially decrease transportation expenses.

Analysts from various firms have provided price targets for Carvana, including JMP Securities at $135, RBC Capital Markets at $90, Morgan Stanley at $75, Jefferies at $125, Deutsche Bank at $108, and an unnamed firm at $110. Despite these positive developments, some firms maintain a Hold rating on Carvana’s stock, indicating a degree of caution alongside recognition of the company’s recent achievements and improved financial health. These are recent developments that provide a snapshot of Carvana’s current performance and future prospects.

InvestingPro Insights

As investors digest the news of Ernest Garcia II’s recent share sales in Carvana Co. (NYSE:CVNA), InvestingPro data and tips provide a deeper context into the company’s financial health and stock performance. Carvana, with a market capitalization of $22.98 billion, has been trading at a P/E ratio of 19.55, indicating investor expectations of future earnings growth. This is supported by the fact that 9 analysts have revised their earnings upwards for the upcoming period, suggesting a potential upside that market participants might want to consider.

Despite recent insider sales, Carvana’s stock has demonstrated a significant return over the last week with a 9.64% price total return, as well as a remarkable 367.48% return over the past year. This could signal strong market confidence or a rebound from previous lows, which is an important consideration for both current and prospective investors. Moreover, the company’s liquid assets exceed short-term obligations, providing financial flexibility in the near term.

For investors seeking more comprehensive analytics and insights, there are additional InvestingPro Tips available, including assessments of Carvana’s earnings growth potential and valuation multiples. With a current InvestingPro Fair Value estimate of $113.99, slightly above the recent trading price, investors might find an opportunity for entry or to adjust their positions. For those looking to delve deeper into Carvana’s financials and stock performance, they can unlock further tips using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. There are 16 additional tips listed in InvestingPro that could provide valuable guidance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.