Carvana (CVNA) Surges 6.3% on Earnings Beat, But Q4 Outlook Sparks Volatility – What’s Next?

Summary
• Carvana’s stock rockets 6.3% intraday, hitting $327.9 after a $302.42 low
• Q3 revenue soars 54.5% to $5.65B, outpacing estimates by $570M
• Cautious Q4 guidance triggers 12.7% post-earnings sell-off, sparking sector debate

Carvana’s volatile day reflects a tug-of-war between record quarterly results and a tempered outlook. The stock’s 6.3% rally from a 52-week low of $148.25 to a near-term high of $327.9 underscores investor optimism over its $5.65B revenue surge. Yet, a post-earnings plunge highlights lingering concerns about macroeconomic headwinds and operational risks.

Earnings Beat Overshadowed by Cautious Q4 Outlook
Carvana’s 6.3% intraday surge was fueled by a record $5.65B revenue quarter, driven by 44% YoY growth in retail units sold. However, the stock’s 12.7% post-earnings drop exposed investor skepticism over its Q4 guidance, which fell short of expectations. Management cited risks from auto loan delinquencies and operational challenges, dampening enthusiasm despite a 55% YoY revenue increase and $263M net income. The mixed signals created a volatile trading environment, with bulls focusing on the earnings beat and bears fixating on the cautious outlook.

Auto Dealership Sector Mixed as Carvana Outperforms
The Auto & Truck Dealerships sector showed divergent trends, with Houston-area dealers reporting a 9.1% YoY sales increase in the 12 months ending July 2025. However, Carmax (KMX), the sector leader, fell 2.2% intraday, contrasting Carvana’s 6.3% rally. While Carvana’s digital model and cost-cutting measures drove profitability, traditional dealers faced challenges from flat car sales and pricing pressures. Carvana’s 54.5% revenue growth outpaced the sector’s 9.1% sales increase, highlighting its unique position in the used-vehicle market.

Options Playbook: Leveraging Volatility with CVNA20251107C325 and CVNA20251107C330
• 200-day MA: $297.37 (below current price) • RSI: 41.36 (oversold) • MACD: -9.997 (bearish) • Bollinger Bands: Price near upper band ($381.81) • 30D MA: $357.50 (resistance ahead)

Carvana’s technicals suggest a short-term bearish trend amid a long-term range. Key levels to watch include the 200-day MA ($297.37) and Bollinger Bands ($308.66–$381.81). The RSI at 41.36 indicates oversold conditions, but the negative MACD (-9.997) and bearish histogram (-3.137) suggest momentum is shifting. Aggressive bulls may consider leveraged options to capitalize on potential rebounds.

• CVNA20251107C325 (Call, $325 strike, 11/7 expiry):
- IV: 66.08% (high volatility)
- LVR: 30.08% (moderate leverage)
- Delta: 0.5403 (moderate sensitivity)
- Theta: -2.362 (rapid time decay)
- Gamma: 0.0157 (high sensitivity to price swings)
- Turnover: $390,956 (liquid)
- Payoff at 5% upside ($342.28): $17.28/share
- This call offers a balance of leverage and liquidity, ideal for a short-term bullish bet on a rebound above $325.

• CVNA20251107C330 (Call, $330 strike, 11/7 expiry):
- IV: 66.40% (high volatility)
- LVR: 38.17% (aggressive leverage)
- Delta: 0.4620 (moderate sensitivity)
- Theta: -2.177 (rapid time decay)
- Gamma: 0.0157 (high sensitivity to price swings)
- Turnover: $369,093 (liquid)
- Payoff at 5% upside ($342.28): $12.28/share
- This option provides higher leverage for a breakout above $330, with strong gamma to benefit from price swings.

If $325 breaks, CVNA20251107C325 offers a high-gamma play. Aggressive bulls may consider CVNA20251107C330 into a bounce above $330.

Backtest Carvana Stock Performance
Below is an interactive event-backtest module. It summarises how CVNA’s share price behaves in the 30 trading-days that follow every ≥ 6 % one-day jump (2022-01-01 – 2025-11-03).Key takeaways (concise):• 132 events identified. • Median path: price drifts sideways the first week; cumulative outperformance appears only after ~15 days, reaching +2 ppts vs. benchmark by day 30. • Win-rate climbs from ~43 % (day 1) to 58 % (day 30); however, most readings are statistically insignificant. • No clear short-term edge—momentum materialises slowly and modestly.Feel free to explore the module for full detail or request deeper cuts (e.g., sub-periods, different thresholds, risk-adjusted metrics).

Volatility to Continue – Watch for $310 Breakdown or $345 Rebound
Carvana’s 6.3% intraday surge masks a fragile technical setup, with RSI at oversold levels and a bearish MACD. The stock’s 52-week high of $413.33 remains distant, but a breakdown below $308.66 (lower Bollinger Band) could trigger a test of the 200-day MA at $297.37. Conversely, a rebound above $345.23 (30D MA) may reignite bullish momentum. Sector leader Carmax (KMX) fell 2.2%, signaling broader dealer sector caution. Investors should monitor Carvana’s Q4 guidance and macroeconomic risks, such as auto loan delinquencies, while using options like CVNA20251107C325 to hedge or capitalize on short-term swings.