Did the Amazon-Hertz Partnership Just Shift Carvana's (CVNA) Competitive Landscape?

• Hertz recently announced a partnership with Amazon to begin selling certified used cars directly on Amazon Autos, creating a new online channel for vehicle sales and heightened competition for digital retailers like Carvana.
• This move is expected to impact Carvana’s market position by introducing Amazon's extensive customer base and streamlined platform to the online used car space, which could challenge Carvana’s sales channels and inventory access, particularly for used Hertz vehicles.
• We’ll explore how Amazon’s entry into the online used car market through the Hertz partnership could reshape Carvana’s long-term growth assumptions.

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Carvana Investment Narrative Recap

Carvana’s investment premise rests on the belief that it can sustain rapid growth by leveraging its digital-first used car retail platform, advanced logistics, and expanding service capabilities. The recent announcement of Hertz selling certified used cars via Amazon does introduce a meaningful near-term threat to Carvana’s market share and vehicle sourcing, as Amazon’s broad reach could disrupt both sales volume and access to former Hertz inventory, affecting a key short-term performance driver and highlighting competitive risk.

Among Carvana’s recent developments, the rollout of same-day vehicle delivery in the Chicago area stands out. This initiative aligns directly with Carvana’s need to sharpen its digital convenience and operational efficiency, factors that could help counterbalance new competition as customer expectations around speed, trust, and online buying experiences continue to rise in the wake of Amazon’s entry.

Yet in contrast, investors should be aware that surging competition from digital giants could impact Carvana’s pricing power and inventory access if...

Read the full narrative on Carvana (it's free!)

Carvana's narrative projects $33.2 billion in revenue and $2.2 billion in earnings by 2028. This requires 26.8% yearly revenue growth and a $1.6 billion earnings increase from the current $563.0 million.

Uncover how Carvana's forecasts yield a $414.20 fair value, a 16% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have valued Carvana between US$62.76 and US$500 across 14 opinions. With such diverging views, competition from entrants like Amazon raises important questions for future revenue growth.

Explore 14 other fair value estimates on Carvana - why the stock might be worth less than half the current price!

Build Your Own Carvana Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Carvana research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.
• Our free Carvana research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Carvana's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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