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Key Takeaways
- Needham analysts upgraded Carvana stock to “buy” from “hold,” calling the company a “secular growth story.”
- The company introduced a new feature that automatically applies federal electric vehicle (EV) tax credits at checkout.
- Carvana shares continued to rise, adding more than 5% in intraday trading Wednesday.
Carvana (CVNA) shares sped higher Wednesday after analysts at Needham upgraded its stock and the company unveiled new features for buying electric vehicles (EVs).
The digtal car-buying company is a “secular growth story with a cyclical recovery kicker,” Needham analysts Chris Pierce and Mackenzie Holleran wrote in a Wednesday note in which they lifted their rating to “buy” from “hold.”
Needham issued a price target of $160, a 27% premium over Tuesday’s closing price. Carvana shares, which traded as low as $25.09 last November, were up 5.7% to $132.79 as of 12:15 p.m. ET Wednesday.
“After a volatile past we see [Carvana] becoming a profitable secular growth story, with increasing retail unit sales and improving gross profit per unit metrics from leveraging a high-fixed-cost base,” the analysts wrote.
New Features for Buying EVs
Carvana on Wednesday launched a “streamlined process” it said makes buying used EVs easier. The new process lets customers search for EVs that specifically qualify for the Clean Vehicle Tax Credit and automatically applies the up to $4,000 in savings at checkout.
“By integrating the federal tax credit directly into our ecommerce experience, we are driving convenience and savings for the increasing portion of our customers interested in buying EVs,” Chief Product Officer Dan Gill said.