What Happened?
Shares of online used car dealer Carvana (NYSE: CVNA) jumped 4.4% in the afternoon session after investor Jim Cramer called the company “one of his favourite companies” for the period leading into 2026.
During a segment on CNBC, the former hedge fund manager explained that part of the reason a key competitor massively underperformed was that Carvana had a “better business model.” The positive commentary seemed to resonate with investors, driving the stock higher despite other news. In a separate development, the company's Chief Financial Officer, Mark W. Jenkins, sold 12,640 shares for approximately $4.79 million.
After the initial pop the shares cooled down to $400.38, up 4.8% from previous close.
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What Is The Market Telling Us
Carvana’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 6.6% on the news that Wedbush upgraded the stock to “Outperform” from “Neutral” and raised its price target. The firm increased its price target to $400 from $380. The upgrade followed a period where Carvana's shares had declined by about 13% over the previous month. Wedbush suggested this pullback was an overreaction and presented a compelling opportunity for investors. The analyst firm noted the stock's weakness was partly due to underwhelming performance from Carvana's closest peer, CarMax, as well as broader concerns in credit markets. Wedbush believed the stock's valuation had become attractive and viewed the risk/reward balance as favorable.
Carvana is up 101% since the beginning of the year, and at $400.38 per share, has set a new 52-week high. Investors who bought $1,000 worth of Carvana’s shares 5 years ago would now be looking at an investment worth $1,757.
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