Carvana (CVNA) Plummets 2.5% Amid Record Earnings: What’s Fueling the Selloff?

Summary
• Carvana’s stock tumbles 2.5% to $324.01, despite Q3 revenue soaring 54.5% to $5.65B
• EPS miss and margin slowdown trigger investor caution, overshadowing bullish analyst ratings
• Sector peers like Autonation (AN) also decline, hinting at broader retail auto sector jitters

Carvana’s stock faces a sharp intraday decline of 2.5% to $324.01, trading between $316.09 and $326.40. The selloff follows mixed reactions to its record Q3 results, where revenue and unit sales surged but earnings fell short of expectations. With the auto retail sector under pressure and macroeconomic headwinds looming, investors are recalibrating their bets on Carvana’s growth story.

Earnings Beat Overshadowed by EPS Miss and Margin Concerns
Carvana’s stock sold off sharply after reporting Q3 results that combined record revenue ($5.65B, +54.5% YoY) with a $1.03 EPS miss against a $1.29–$1.33 consensus. While revenue growth and 44% YoY unit sales expansion signaled strong demand, investors fixated on the EPS shortfall and slower margin improvement. Management’s emphasis on long-term automation and scale, though strategically sound, failed to offset near-term profitability concerns. Analysts like Bank of America trimmed price targets, and heavy trading volume amplified the selloff as mixed market sentiment took hold.

Auto Retail Sector Sinks as Autonation Drags, CVNA Follows
The broader auto retail sector mirrored Carvana’s decline, with Autonation (AN) falling 1.74% intraday. While Carvana’s drop was tied to earnings-specific concerns, the sector’s weakness reflects broader macroeconomic pressures, including rising auto loan delinquencies and tariff-driven pricing volatility. Autonation’s struggles with inventory costs and margin compression highlight shared challenges in the space, though Carvana’s digital model and automation focus position it differently from traditional dealerships.

Options and ETFs Highlight Short-Term Volatility
• MACD: -9.74 (bearish divergence), Signal Line: -7.44, Histogram: -2.30 (negative momentum)
• RSI: 46.64 (oversold territory), Bollinger Bands: $308.26–$378.48 (wide range)
• 200D MA: $297.87 (below current price), 30D MA: $355.54 (resistance ahead)

Carvana’s technicals suggest a short-term bearish bias amid oversold RSI and bearish MACD divergence. Key support levels at $308.26 (lower Bollinger Band) and $344.18 (200D MA) could dictate near-term direction. The 200D MA remains a critical floor, while the 30D MA at $355.54 acts as a near-term resistance. With sector peers like Autonation under pressure, leveraged ETFs (if available) could amplify directional bets, though liquidity constraints may limit their utility.

Top Options Contracts:
• CVNA20251114P320 (Put): Strike $320, Expiry 2025-11-14, IV 59.68%, Leverage 27.27%, Delta -0.4438, Theta -0.0181, Gamma 0.0118, Turnover 7.68M
- IV (high volatility), Leverage (moderate upside), Delta (moderate sensitivity), Theta (slow decay), Gamma (positive sensitivity to price swings).
- This put option offers a balanced risk-reward profile for a 5% downside scenario (projected price $307.81), yielding a $12.19 payoff. Its high IV and liquidity make it ideal for hedging or speculative short-term bearish bets.
• CVNA20251114C320 (Call): Strike $320, Expiry 2025-11-14, IV 58.56%, Leverage 22.16%, Delta 0.5565, Theta -1.208, Gamma 0.0120, Turnover 396K
- IV (moderate volatility), Leverage (moderate upside), Delta (moderate sensitivity), Theta (high decay), Gamma (positive sensitivity).
- This call option suits aggressive bulls eyeing a rebound above $320. A 5% upside (projected $340.21) would yield a $20.21 payoff. Its high gamma and moderate IV position it well for a breakout trade.

Trading Insight: Aggressive bulls may consider CVNA20251114C320 into a bounce above $320, while cautious bears should monitor CVNA20251114P320 for a breakdown below $310.

Backtest Carvana Stock Performance
Below is an interactive event-study dashboard that summarises how CVNA’s share price behaved after every ≥ 3 % intraday plunge (defined as the day’s low ≤ 97 % of the previous close) from January 2022 through 4 Nov 2025.Key take-aways:1. Population & window • 295 qualifying plunge days over the 46-month sample. • Event window evaluated: 1- to 30-trading-day forward returns versus holding CVNA continuously.2. Performance pattern • Average excess return stays negative for the first two weeks; by day 15 it turns mildly positive and drifts to ≈ +0.3 pp by day 30, but none of the daily deltas are statistically significant at conventional levels. • Win-rate hovers near 50 %; no persistent edge detected.3. Practical implication • A simple “buy the −3 % dip” rule in CVNA has not generated a statistically reliable advantage during 2022-25. • Additional filters (e.g., macro backdrop, volume spike, oversold oscillators) may be required to isolate higher-quality setups.Feel free to explore the interactive chart above, or let me know if you’d like deeper cuts (different plunge thresholds, shorter/longer horizons, risk-controlled exits, etc.).

CVNA’s Short-Term Outlook: Watch for $310 Breakdown and Sector Sentiment Shifts
Carvana’s selloff reflects a tug-of-war between long-term growth optimism and near-term margin concerns. While the stock’s technicals and options activity suggest short-term volatility, sustainability hinges on Q4 guidance and macroeconomic clarity. Autonation’s 1.74% decline underscores sector-wide fragility, amplifying the need to monitor $310 (lower Bollinger Band) as a critical support level. Investors should prioritize liquidity and leverage ratios in options strategies, with a focus on IV expansion and key earnings catalysts. Watch for $310 breakdown or regulatory reaction to gauge the next move.