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Further Reading from MarketBeat.com Buyer Beware: Carvana Is Driving an Auto Lending CrisisWritten by Jordan Chussler. Published 11/19/2025. 
Key Points - Online used vehicle retailer Carvana is having a strong year with a 62% YTD gain, but after hitting its ATH, shares may be nearing a correction.
- The company reported mixed results when it announced Q3 earnings, posting a miss on EPS and a beat on revenue.
- Despite CVNA’s 510% gain since the end of 2023, questions linger about the company’s turnaround after shares fell 99% between 2021 and 2022.
2025 has not been kind to consumer discretionary stocks. Among the S&P 500's 11 sectors, consumer discretionary has posted the fourth-worst year-to-date performance. Over the past month, its 2.43% loss was exceeded only by communication services (2.84%) and materials (2.77%). Despite the sectorheadwinds, a few companies have stood out—most notably Tempe, Arizona-based Carvana (NYSE: CVNA). Shares of the online-only used-vehicle retailer are up nearly 62% YTD. While everyone's making predictions about what might happen in 2026, we've identified 5 stocks with catalysts that are already locked and loaded.
These aren't hopes or projections. These are scheduled events, signed contracts, and approved projects that will play out over the next 12 months.
The difference between 100% gains and missing out completely? Positioning before 2026 arrives. Click here to get your free copy of this report But Carvana has a history of dramatic swings. From August 2021 to December 2022, for example, CVNA shares plunged about 99% from their then-all-time high. Given that track record and recent signs of financial strain, investors should take a closer look under the hood before jumping in. Carvana’s Lending Practices Are Under Scrutiny On Oct. 1, Carvana hit an all-time high closing price of $395.41. Since then, the stock has pulled back more than 18%, in part after the company released mixed Q3 results on Oct. 29. Carvana reported earnings per share (EPS) of $1.03 versus expectations of $1.29—a 26-cent miss. It did beat on revenue, however: $5.65 billion versus expectations of $5.04 billion, a 54.5% year-over-year increase. Analysts expect earnings to rise sharply next year—projected growth of about 78.25%, from $2.85 to $5.08 per share—and the average 12-month price target implies more than 28% upside. Still, the company's lending practices raise concerns—especially around its underwriting standards. Carvana advertises an approval rate near 99% regardless of credit score, and it lists a minimum income requirement of just $10,000 per year. For context, the U.S. federal poverty level (FPL) for a one-person household in the 48 contiguous states is $15,650 in 2025. That means Carvana may approve buyers earning as much as about 36% below the FPL for auto loans with APRs of up to 27.99%. The Hindenburg Report Made Matters Worse A recent report from Hindenburg Research found that more than 44% of the loans Carvana originates are classified as nonprime (credit scores between 601–660), and over 80% of those fall into deep subprime. The stock has rallied more than 510% since the end of 2023, leading many investors to believe solvency issues are behind the company. But Hindenburg's report—based on four months of document review and 49 interviews with industry experts, former Carvana employees, competitors, and related parties—concludes that "Carvana's turnaround is a mirage." The report highlights major headwinds: used vehicle prices are down roughly 20% over the past three years, and subprime auto loan delinquencies have reached record highs. Hindenburg also found that about 26% of Carvana's gross profit comes from selling customers' auto loans to third parties, "largely in the risky subprime and deep subprime space." Concerning Financials Reflect Its Lending Strategy Although Carvana beat analyst EPS estimates in nine of the last 12 quarters, several financial red flags appear when you dig into its statements. At the end of 2024, the company's balance sheet showed total assets of $8.484 billion, matched by total liabilities and shareholders' equity of $8.484 billion. More recently, net income fell from $216 million in Q1 to $151 million in Q3—a roughly 30% decline—while debt issuance rose about 30%, from $613 million in Q1 to $977 million in Q3. Valuation metrics amplify those concerns: the stock's forward price-to-earnings ratio is about 114.96 and its forward price-to-book ratio is 50.64, making the company look expensive relative to its fundamentals. Market participants have noticed: current short interest equals 5.94% of the float, and institutional ownership is under 57%.
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