10 Best Auto and Truck Dealership Stocks to Invest In

1. Carvana Co. (NYSE:CVNA)

Number of Hedge Fund Holders: 66

Carvana Co. (NYSE:CVNA) operates an online platform for buying and selling used cars. It stands out due to its innovative use of technology including 360-degree imaging technology that provides detailed views of each car allowing customers to inspect the vehicle virtually. It also offers same-day home delivery and pick up from one of its unique vending machines, once a purchase is made.

The company reported an exceptional third quarter in 2024, achieving record financial performance across several key metrics, despite operating in a challenging automotive market. Management noted that over the last two and a half years, they have implemented strategies to enhance operational and financial efficiencies, allowing it to grow rapidly while maintaining profitability. During the quarter, Carvana Co. (NYSE:CVNA) sold 108,651 retail units, up 34% year-over-year, while total revenue reached $3.655 billion indicating a 32% increase during the same time.

As a result of management’s efforts, these sales figures came in with record income growth. The company reported a record Adjusted EBITDA margin of 11.7%, which as per the management is a new all-time best for public automotive retailers. Carvana Co. (NYSE:CVNA) attributed growth to its improved customer experience, expanding inventory selection, and increased brand awareness. Moving forward, management plans to invest an additional $5 million to $10 million in advertising in the 4th quarter to further expand its reach. It is the best auto and truck dealership stock to invest in now.

Optimist Fund stated the following regarding Carvana Co. (NYSE:CVNA) in its Q3 2024 investor letter:

“Carvana Co. (NYSE:CVNA) continues to perform well with unit growth accelerating from mid-teens in Q1 to over 30% in Q2, while achieving double the adjusted EBITDA margins of the automotive retail sector. It remains our largest position.”

While we acknowledge the potential of Carvana Co. (NYSE:CVNA) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CVNA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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