Carvana Co. CVNA finalized a deal on Feb. 28, 2025, to acquire a franchised dealership in Arizona, per Automotive News. This move marks a potential shift into new-vehicle sales for the online retailer, which has exclusively sold used cars since its launch in 2013.

The company purchased Jerry Seiner Chrysler-Dodge-Jeep-Ram in Casa Grande, AZ, which is around 45 miles south of its Tempe headquarters. While the purchase price remains undisclosed, the dealership will be renamed Casa Grande Chrysler-Dodge-Jeep-Ram and is scheduled to reopen under Carvana’s ownership on March 3, 2025. It will retain all 41 employees. This acquisition represents a strategic shift from Carvana’s usual business model, hinting at a possible expansion into new car sales. In recent years, the company has faced financial and operational hurdles amid fluctuations in the auto industry and a volatile used-car market.

The move draws comparisons to CarMax, the largest used-car retailer in the United States, which once operated new-car franchises. CarMax entered new-car sales in the mid-1990s with a Chrysler franchise, disrupting traditional dealerships. The company eventually shifted its focus solely on used cars, shutting down its new vehicle operations in 2021.

Carvana’s acquisition raises questions about whether the company plans to expand further into franchised dealerships or if this is a one-time experiment. The success of this venture could determine whether Carvana significantly alters its strategy or remains focused on its online used-car marketplace.

In the fourth quarter of 2024, Carvana’s retail unit sales continued to grow, representing a rise of 50.3% year over year on strong demand. Carvana expects a sequential increase in year-over-year growth of retail unit sales in the first quarter of 2025. It also expects significant growth for the full-year 2025. 

CVNA’s Zacks Rank & Other Key Picks

Carvana sports a Zacks Rank #1 (Strong Buy) at present.

Some other top-ranked stocks in the auto space are Geely Automobile Holdings Limited GELYY, Dana Incorporated DAN and Strattec Security Corporation STRT, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GELYY’s fiscal 2025 sales and earnings indicates year-over-year growth of 66.62% and 149.31%, respectively. EPS estimates for fiscal 2025 and 2026 have improved 15 cents and 38 cents, respectively, in the past 60 days. 

The Zacks Consensus Estimate for DAN’s 2025 earnings implies year-over-year growth of 70.21%. EPS estimates for 2025 and 2026 have improved 10 cents each in the past 30 days.

The Zacks Consensus Estimate for STRT’s 2025 sales indicates year-over-year growth of 2.61%. EPS estimates for 2025 and 2026 have improved 91 cents and $1.06, respectively, in the past 30 days.

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Carvana Co. (CVNA) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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