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Carvana Shares Plummet on Earnings Miss
19 Feb
Summary
- Carvana's stock dropped significantly premarket due to a profit miss.
- Higher-than-expected vehicle inspection and repair costs impacted earnings.
- The company rejected short seller allegations of overstated earnings.
Carvana's stock experienced a significant downturn in premarket trading on Thursday, February 19, 2026. The online used-car retailer's fourth-quarter profit did not meet Wall Street's projections, primarily due to unexpected cost increases.
Shares fell approximately 16% to $302, approaching their lowest level since early November 2025. This decline followed the release of disappointing earnings after market close on Wednesday, prompting several brokerages to reduce their price targets for the stock.
The company cited higher-than-anticipated expenses related to vehicle inspection, repair, and detailing across multiple sites as a key factor. Elevated retail depreciation rates also contributed to increased per-unit costs during the quarter.
These results come months after Carvana's inclusion in the S&P 500 index and follow the company's rejection of fresh allegations from short seller Gotham City Research. The short seller claimed Carvana overstated its 2023-2024 earnings by over $1 billion. Approximately 7% of Carvana's tradable shares were subject to short interest.
