Carvana Shares Rise on Breakneck Sales Growth

Dow Jones10-29

Carvana's rapid growth streak continues even as the overall U.S. used-car market is flat and high prices and interest rates continue to challenge car buyers. Investors are taking note, adding to the retailer's already rich valuation.

Shares of the online used-car retailer were up 15% in morning trading Thursday, on track for their best day in more than a year.

The rally comes a day after Carvana reported a 39% increase in third-quarter vehicle sales. The news wasn't entirely positive; sales increased more quickly than profit did. Expenses such as advertising were up on a per-car basis. Higher diesel prices and interest rates are sapping some of the bottom line.

Yet analysts see a long runway ahead. Carvana's business has roughly doubled in two years, and the company says its share of the highly fragmented used-car market is only about 2%.

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