Carvana stock rallies as gross profit per unit more than doubles in Q4

Carvana Co (NYSE: CVNA) soared in extended hours on Thursday even though it reported worse than expected financial results for its fourth quarter.

Why is Carvana stock up in after-hours?

The stock is being rewarded primarily because the online used cars retailer saw its adjusted gross profit per unit come in at $5,730 – up 115% versus the same quarter last year.

Carvana now forecasts a slight year-on-year increase in retail units sold in its current financial quarter. Ernest Garcia III – the chief executive of Carvana Co said in a press release today:

$CVNA is convinced that its adjusted EBITDA will print materially above $100 million in Q1. Note that Hedgeye reiterated Carvana stock a top short idea earlier this month (find out more).

Notable figures in Carvana Q4 earnings report

• Lost $144 million versus the year-ago $806 million
• Per-share loss also narrowed from $7.61 to $1.0
• Adjusted EBITDA margin came in at 2.5% in Q4
• Revenue declined 15% year-over-year to $2.42 billion
• Consensus was 85 cents a share loss on $2.56 billion revenue

Carvana sold a total of 76,090 retail units in its recently concluded quarter - down 13% versus a year ago, as per the earnings report. Still, Carvana stock is up in after-hours because CEO Garcia also said on Thursday: