Carvana Co. is the used-vehicle retailer known for their vehicle vending machine, and they’re still configuring themselves to be the best they can be. The company reported a seriously disappointing net loss of $47.2 million in the fourth quarter of 2017, greater than the loss from the previous year. Despite the losses, CEO Ernie Garcia believes the company is on the right track.
The CEO considers 2017 “another year of tremendous growth and progress for Carvana,” stating the fourth quarter was excellent by “any reasonable measure.” Even though he felt this way, analysts expected much more from them. Vehicle sales and revenue for both the fourth quarter and 2017, along with total net loss, were far worse than predicted. And regardless of if Carvana shares fell 6.5 percent to $17.46, analysts are still optimistic about their long-term potential.
The company may have missed their target marks, but that doesn’t mean the year was a total failure. Carvana’s previous guidance to analysts suggested the fourth quarter would see vehicle sales anywhere from 13,600 to 15,000 units, only to just fall short with 13,517. It’s still good, considering sales more than doubled from last year, where only 5,600 units were moved. Garcia blames an underwhelming Cyber Monday for the missed sales target. Fourth quarter revenue was also under target but still managed to grow tremendously to $265.1 million, up from last years $106.8 million.
In 2017, Carvana opened to 44 new markets, five of which were in the fourth quarter. Just this year, they’ve opened in another 10. They’ve even added five new car vending machines since last year, making a company total of seven. This year, they plan to open in 30 to 40 markets, selling 89,000 to 93,000 vehicles. If they can hit their targets, they will be on the right path to success.