Wedbush Upgrades Carvana (CVNA) to Outperform, Citing Improving Trajectory

Wedbush has upgraded Carvana Co. (CVNA) to an Outperform rating, reflecting the research firm's view that the online used-car retailer's operating trends and balance sheet dynamics are moving in a healthier direction. The research note, reported by Yahoo Finance, signals growing analyst confidence after a period of heavy investor scrutiny and operational resets at Carvana.

The upgrade underscores Wedbush’s assessment that several key headwinds that pressured Carvana’s shares—inventory imbalances, elevated financing costs and elevated marketing intensity—are moderating. Wedbush highlighted signs of stabilization in supply and demand metrics, improvements in retail margins and the potential for more disciplined capital allocation as factors that could support a sustained recovery in the company’s cash flow profile.

Carvana’s business model, built around a vertically integrated online sales platform and vehicle reconditioning network, remains sensitive to used-vehicle price swings and cost of funding. Wedbush’s call suggests the firm now believes Carvana is better positioned to navigate those risks, in part due to management actions taken earlier this year to shore up liquidity and streamline operations. The note did not, however, eliminate mention of residual execution risk and the importance of continued margin recovery.

Market participants will watch upcoming quarterly results and inventory metrics closely for confirmation of the improvement narrative. If Carvana can sustain higher retail take-rates and reduce days-to-sell, the company could see meaningful upside relative to current valuation levels, Wedbush implies. Investors should also consider macro factors, such as interest rates and used-car demand trends, which remain influential for near-term performance.

This upgrade from Wedbush may prompt analysts and institutional investors to revisit their own forecasts and price targets for CVNA. As with any single-firm upgrade, it represents one view among many; prudent investors will weigh it alongside broader industry indicators and Carvana’s ongoing execution against its restructuring goals. The full research note was summarized by Yahoo Finance, which first reported the upgrade.