10 Best Car Stocks To Invest In Now

2. Carvana Co. (NYSE:CVNA)

Number of Hedge Fund Holders: 66

Carvana Co. (NYSE:CVNA) is one of the fastest-growing car retailers in the United States. Based in Tempe, Arizona, the company operates an online platform to buy and sell used cars. In 2021, it was included in the Fortune 500 list, making it one of the youngest companies to be named in the list – just eight years after it was founded.

The company experienced significant growth during the pandemic years, as the e-commerce industry boomed with restrictions on in-person shopping. However, CVNA’s fortunes suffered in 2022, burdened by high interest rates, rising costs of automobiles, and heavy debt. A year later, it turned things around again, with its share price increasing by over 1000%, driven by cost cuts and strategic debt restructuring.

The growth story is still ongoing. As of December 26, its share price had surged by over 300% year-to-date, as the company focuses on enhancing operational efficiencies and cash flow. Carvana Co. (NYSE:CVNA) is continuing to see strong demand for vehicles. During its recent Q3 2024 earnings call on October 30, the company reported a 34% increase in retail units sold from last year.

Revenue for the quarter was $3.655 billion, up 32% year-over-year. Net income stood at $148 million, whereas operating income was posted at $337 million. Adjusted EBITDA was $429 million, with a margin of 11.7% – a new company record. EPS was logged at $0.64, beating expectations of 25 cents per share.

Looking ahead, Carvana Co. (NYSE:CVNA) anticipates sequential growth in retail units sold in the fourth quarter of 2024 and adjusted EBITDA to be significantly above the high end of its previously communicated range of $1 billion to $1.2 billion for the full year. These forecasts have resulted in a bullish sentiment around the stock, with Wall Street analysts having a consensus Buy rating for CVNA.

Hedge fund sentiment is improving as well. According to Insider Monkey’s database for Q3 2024, 66 hedge funds held a stake in the company, up from 61 at the end of Q2. It is one of the best car stocks to invest in now.