Carvana Q2 2026 Revenue Hits Record As Supply Lags

Carvana (CVNA) reported record revenue growth of 52% in the second quarter of 2026, accompanied by a 38% increase in retail car sales, yet the stock has fallen 15.1% over the past twelve months. This performance lags significantly behind the 17.1% return of the S&P 500, highlighting a disconnect between the company's top-line expansion and its market valuation.

The stock currently trades at 28.7 times earnings, a premium compared to the S&P 500's multiple of 21.5. This valuation gap exists despite Carvana's operating margin of 8.9% over the past year, which trails the broader index's 18.5% margin. The market appears to be pricing in sustained expansion rather than current profitability, relying heavily on Carvana's three-year average annual revenue growth rate of 30.8%, which far outpaces the S&P 500's 5.8% pace.

Management identified a key headwind during the July second-quarter earnings call: inventory has expanded more slowly than sales for several months. To address this bottleneck, Carvana is expanding its capacity to prepare vehicles at its ADESA facilities and existing inspection centers. The strategy showed mixed results in the second quarter, with regions receiving the heaviest capacity investments seeing inventory grow by 57% and sales rise by 54%. In contrast, areas with the lightest upgrades saw inventory increase by 17% while sales grew by 30%.

Despite strong underlying demand, the company's profit outlook remains cautious. Management forecast adjusted EBITDA for 2026 to land between $2.7 billion and $3.0 billion, an increase from $2.24 billion last year. This guidance is notable because Carvana's second-quarter result was already running at an annual rate above $3 billion, meaning the top end of the full-year range does not exceed the pace already achieved in that single quarter. An analyst noted on the July call that this guidance implies a step down in performance for the second half of the year.

Historical volatility offers another reason for caution regarding the stock's risk profile. Carvana shares have underperformed the S&P 500 during previous market shocks by wide margins. During the 2025 tariff shock, Carvana stock fell 42% while the S&P 500 declined 19%. In the 2023 yield shock, shares dropped 41% against a 9.5% loss for the index. The drawdown was most severe during the 2022 inflation shock, when Carvana stock lost 94% while the broader market retreated by 24%.

Looking ahead, the number of retail cars sold in the third quarter will be a critical metric for investors. Management stated on the July call that they expect to sell more retail vehicles in the third quarter than in the second, when the company set a record with 197,325 units sold. Independent indicators support this expectation; in late September, Jefferies noted that website data showed Carvana's vehicle sales growth accelerating to approximately 40% in recent weeks. A third-quarter count clearly above 197,325 would confirm that Carvana is preparing cars quickly enough to sustain its growth trajectory.