Is Carvana Co (CVNA) overvalued?
On Equity Rank's model estimate, CVNA trades 160% above its fair value. Carvana Co (CVNA) last closed at $73.57; the multi-method model fair value is $28.34.
| Price | Model fair value | Price vs model |
|---|---|---|
| $73.57 | $28.34 | 160% above |
What the answer rests on
- 0 of 7 valuation methods put CVNA's value above its price and 7 put it below, so the methods mostly agree.
- To justify today's price, CVNA's free cash flow would need to grow about 32.8% a year for ten years (a reverse discounted cash flow).
- CVNA trades at 37.3 times its last year's earnings, against a median of 12.0 for 11 profitable Auto Dealership companies.
- Over the past year the price sat below the model fair value on 7% of trading days. The gap ranged from 63% below to 384% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind CVNA's fair value · What prices assume · Other companies