Carvana got a rating upgrade from Morgan Stanley analyst Adam Jonas who also almost doubled his price target on the online used-car retailer’s shares.
Jonas raised his rating on Carvana to overweight from equal weight. He boosted price target to a Wall Street high of $420 from $225.
This followed Carvana’s earnings report that showed +65% year-over-year growth in revenue to $1.83 billion for the fourth quarter, beating analysts’ forecast of $1.6 billion. Net loss widened to -87 cents a share from -82 cents in the year-ago quarter.
According to Jonas, Carvana "is uniquely positioned to serve an automotive and transportation [addressable market] that goes far beyond the used-car market, driving potentially far higher growth that is not reflected in today’s share price.” He added, “In our opinion, describing Carvana as just a ‘used car dealer’ is like describing Amazon nearly two decades ago as just an online bookseller.”