Feb 19 (Reuters) - Shares of Carvana (CVNA.O) fell sharply in premarket trading on Thursday after the online used-car retailer posted fourth-quarter profit that fell short of Wall Street expectations, pressured by higher-than-anticipated costs.
Shares of the online-only used vehicle retailer were last down 16% at $302, putting them on track to open at their lowest level since early November 2025.
At least four brokerages, including J.P. Morgan and RBC, cut their price targets on the stock after the results were announced post market hours on Wednesday.
Carvana said costs were squeezed by bigger-than-expected expenses tied to the inspection, repair and detailing of vehicles across several production sites during the quarter. Higher retail depreciation rates added further pressure on a per-unit basis.
The disappointing results come just months after the retailer, known for its towering vehicle vending machines, capped 2025 by joining Wall Street’s benchmark S&amp;P 500 index, having earlier shrugged off allegations from short sellers.
The stock has long been a favorite among retail investors, fuelling several meme stock rallies in recent years that have repeatedly wrong-footed hedge funds holding bearish positions in the company.
On Wednesday, the company rejected fresh allegations from short seller Gotham City Research that it overstated its 2023–2024 earnings by more than $1 billion. Short interest in Carvana shares available for trading stood at about 7%, according to LSEG-compiled data.

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Online used-car retailer Carvana shares tumble as vehicle reconditioning costs climb