Jim Cramer Praises Carvana Co. for its Business Model, Predicting Further Growth

Carvana Co. (CVNA) is a used car retailer that has seen a 72% YTD gain. Analysts at Morgan Stanley and Piper Sandler have praised the firm's business model, and investors have piled into used car stocks due to inflationary worries. Jim Cramer has previously praised the firm and warned against detractors, and his latest comments suggest that Carvana's stock will continue to rise. Cramer believes that the firm's business model is strong and that the stock is still undervalued despite its recent gains.

Carvana Co. (CVNA), a leading used car retailer, has seen a remarkable 72% year-to-date (YTD) gain in stock price as of July 2, 2025. This impressive performance has drawn the attention of analysts and investors alike. The company's business model, which includes an online platform for buying and selling used cars, has been praised by analysts from Morgan Stanley and Piper Sandler, who have highlighted its potential in the face of inflationary concerns.

On July 11 and July 14, 2025, Ernest C. Garcia II, a significant shareholder with a 10% stake in Carvana, sold a total of $67.9 million in Class A Common Stock. The sales were executed at prices ranging from $342.7188 to $354.4023, reflecting the stock's strong performance over the past year, which saw a 145% return according to InvestingPro data [1]. Garcia sold shares in multiple transactions, with prices ranging from $342.12 to $351.65 on July 11 and from $343.16 to $354.52 on July 14. These sales were part of a Rule 10b5-1 trading plan adopted on December 13, 2024.

In addition to these sales, Garcia converted Class A Units of Carvana Group, LLC into Class A Shares of Carvana Co., totaling 96,026 shares on July 11 and 98,528 shares on July 14. Corresponding cancellations of Class B Common Stock occurred with these conversions. ECG II SPE, LLC, an entity wholly owned and controlled by Mr. Garcia, holds 8,000,000 shares of Class B Common Stock and 10,000,000 Class A Units.

Carvana's recent second-quarter performance has also been commended by analysts. Citi raised its price target for Carvana to $415, citing strong sales tracking that exceeded both company guidance and consensus estimates. Stephens increased its price target to $375, highlighting better-than-expected unit sales and increased EBITDA and EPS forecasts for 2025. Jefferies adjusted its price target to $325, noting accelerated retail unit growth based on web scrape data. BofA Securities lifted its target to $375, maintaining a Buy rating and pointing to Carvana’s potential market share gains and eligibility for S&P 500 inclusion. Citizens JMP reiterated a Market Outperform rating with a $440 price target, emphasizing Carvana’s growth drivers and technological advancements in the automotive sector [1].

Jim Cramer, a prominent financial analyst, has also expressed his belief in Carvana's leadership and business model. In a recent discussion, he mentioned that Carvana's stock is still undervalued despite its recent gains, suggesting that the firm's growth potential remains strong [2].

In conclusion, Carvana Co. (CVNA) continues to attract attention from analysts and investors due to its impressive performance and strong business model. The company's recent stock sales and analyst upgrades reflect a positive outlook on its future prospects.

References:
[1] https://www.investing.com/news/insider-trading-news/carvana-co-garcia-sells-679-million-in-cvna-stock-93CH-4136736
[2] https://finance.yahoo.com/news/jim-cramer-says-believes-carvana-152054224.html