Carvana Co. (NYSE: CVNA) experienced a sharp decline in its stock price, plunging almost 19% after-hours on Wednesday, July 29, 2026, following the release of its second-quarter earnings report and a 2026 adjusted core profit forecast that fell short of Wall Street estimates. The company reported record Q2 results, including retail unit sales of 197,325, up 33% year-over-year, and total revenue of $3.97 billion, exceeding consensus. Gross profit per unit also improved to $6,432, reflecting operational efficiencies. However, the market reacted negatively to the forward guidance.
The company announced an adjusted EBITDA outlook for 2026 ranging from $2.5 billion to $2.8 billion (with other sources citing $2.7 billion to $3.0 billion), which was below the average analyst estimate of $3 billion. Analysts from Wedbush Securities and Morgan Stanley weighed in, noting that while Q2 results were impressive, the guidance suggests that operational improvements might be exhausting, and future gains will require higher volume growth amidst a potentially softening used-car market, rising wholesale prices, and tighter credit conditions.
Despite the record second-quarter performance, including a net income of $513 million and adjusted EBITDA of $769 million, investor focus quickly shifted to the more conservative 2026 outlook. This led to a significant after-hours selloff, with the stock dropping by nearly 19%. This downturn created substantial opportunities for short sellers, who were able to realize significant profits as the stock sank.
