Is Carvana Co. (CVNA) the Top Stock to Buy According to Durable Capital Partners?

In the ever-evolving landscape of the stock market, few investments have garnered as much attention and speculation as Carvana Co. (CVNA). The company, known for its innovative approach to the used car market, has seen a meteoric rise in its stock price, capturing the interest of both retail and institutional investors. One of the most notable investors in Carvana is Durable Capital Partners, which recently increased its holdings in the company by a staggering 142%. This move has raised the question: Is Carvana Co. the top stock to buy according to Durable Capital Partners?



Durable Capital Partners' significant investment in Carvana reflects their confidence in the company's future growth and market position. The firm added $209 million to their shares of Carvana, increasing their position by 142%. This substantial increase in investment indicates a strong belief in Carvana's potential for growth and success in the used car market. Additionally, Carvana's stock has shown impressive performance, with a 122.19% increase over the past year and a 289.38% increase over the past five years. This strong performance further supports Durable Capital Partners' confidence in Carvana's future prospects.



Carvana's e-commerce platform for buying and selling used cars has positioned the company as a leader in the industry, with a market capitalization of $19.64 billion as of March 20, 2025. This market position, combined with Carvana's innovative business model and strong financial performance, makes it a compelling investment for Durable Capital Partners. The company's earnings are forecast to grow by 31.65% per year, which is a strong indicator of future profitability. The stock's 52-week high of $292.84 and its 52-week low of $67.61 show significant volatility, which could present both risks and opportunities for investment. The stock's beta of 3.57 indicates high volatility compared to the market, which might be seen as a potential for high returns.

Carvana's recent financial performance, including exceeding analyst expectations for full-year 2024 earnings and revenues, also likely influenced Durable Capital Partners' decision. The company's consensus EPS estimates increasing by 41% further supports its strong financial outlook. Moreover, Carvana's expansion into new markets, such as the Philadelphia area for same-day vehicle delivery, demonstrates its strategic growth initiatives.

However, it is important to note that Carvana's stock has also faced significant volatility and criticism. The company's share price stability, despite recent fluctuations, indicates a robust market position. The consensus rating of "hold" with a mix of buy, hold, and sell ratings from analysts suggests a balanced view, but the median price target of $114.61, which is significantly lower than the current price, might indicate potential for future growth.

In conclusion, Durable Capital Partners' significant investment in Carvana Co. reflects their confidence in the company's future growth and market position. While Carvana's stock has shown impressive performance and has a strong financial outlook, it is important for investors to consider the risks and volatility associated with the stock. As always, it is crucial to conduct thorough research and analysis before making any investment decisions.