By Mackenzie Tatananni
Carvana stock has been on a tear this year after shaking off allegations that its turnaround was a "mirage." Now, shares are set to notch a new record.
Shares of the used-car dealer rose 1.1% to $461.40 on Wednesday, putting them on pace for the longest winning streak in Carvana's history as a public company.
If the gains hold and the stock closes above $459.68, the company will surpass a $100 billion threshold for the first time on record. At a low point in 2022, the company had a market cap of just $702.51 million.
Fueling the most recent gains was Carvana's inclusion in the S&P 500. S&P Dow Jones Indices confirmed Friday that Carvana will join the benchmark index as part of its quarterly rebalancing. The changes will go into effect before the market opens on Dec. 22.
But the winning streak started before then. The stock has risen for 12 consecutive days and has surged nearly 50%, adding $33 billion in market cap over this period.
The rally began on Nov. 24 as positive analyst commentary, including the assertion that a recent pullback was overdone, caused shares to close up 6.8%. Including Monday's gains, shares are up 127% this year, outstripping a 16% gain for the S&P 500.
Carvana's inclusion in the S&P 500 was a catalyst that many on Wall Street should have seen coming, Gordon Haskett analyst Robert Mollins wrote on Monday.
"When we initiated coverage of Carvana back in July, we noted that S&P 500 inclusion is a future catalyst that should keep many investors bullish on the shares and that catalyst came to fruition," Mollins said. The analyst rates the stock Hold with a $445 price target, suggesting the stock could fall 3.5% from Wednesday's levels.
There's a reason he's sidelined for now: while Carvana is "a proven share gainer with room to continue expanding market share," the stock trades at what Mollins calls a "significant premium to peers," giving it limited multiple expansion opportunity.
"Although the shares appear on track to outperform the broader market, we note that when excluding the gain seen following the first trading day after the announcement, stocks tend to perform broadly in line with the S&P 500," Mollins cautioned.
So far, shares have only continued to gain. It remains to be seen when the rally will peter out.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 10, 2025 13:33 ET (18:33 GMT)
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