Carvana: Another Quarter of Credit Improvement and Growing Liquidity

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Carvana: Another Quarter of Credit Improvement and Growing Liquidity

J P M O R G A N North America Credit Research

31 July 2026

Neutral

Carvana CVNA

Another Quarter of Credit Improvement and Growing

Liquidity

North America Corporate Credit -

Carvana reported second quarter results after the close on Wednesday, July 28th that Media, Broadcasting & Publishing,

were mixed relative to estimates (see table 2 below), but nevertheless highlighted and Autos (HY)

another quarter of solid growth. Moreover, the company’s credit metrics continued AC Avi Steiner, CFA

to improve, while liquidity, including cash on hand, stood at an all-time high.

(1-212) 270-5512

Looking ahead, Carvana guided to further retail unit gains in the current quarter and avi.a.steiner@jpmorgan.com

provided full year adjusted EBITDA guidance that at the mid-point implies nearly J.P. Morgan Securities LLC

30% year-over-year growth, albeit the range was modestly below street

expectations. Debt levels were unchanged to slightly higher post earnings,

however the equity declined 7% on the first trading day post results, which we

believe reflected some market apprehension around slowing growth.

We are not dismissive of the market’s concerns, and believe that some moderation

and modest volatility around rates of growth (including EBITDA per vehicle) was

to be expected in light of the company's size and still rapid expansion, prior IRC

bottlenecks and throughput challenges, vehicle procurement and supply

considerations, ongoing roll-out of productivity initiatives, and varying levels of

demand, in addition to the mixed consumer and economic backdrop (still elevated

rates, middling employment, sub-prime borrower pressures and cyclical

normalization in borrowing metrics). Nevertheless, we expect that as the company