TLDR
- Jim Cramer maintains his bullish stance on Carvana stock, predicting continued upward momentum despite the recent surge
- The stock has soared 8,959.2% over three years, with a 128.3% gain year to date and 14% jump in the past week alone
- Carvana posted record retail units of 143,280 vehicles in Q3 2025, marking a 41% year-over-year increase
- Discounted Cash Flow analysis suggests the stock is overvalued by 41.8%, with a fair value of $321 versus current trading levels
- The company trades at a PE ratio of 102.5x, more than five times higher than the specialty retail industry average of 20.3x
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Jim Cramer isn’t backing away from Carvana. During his recent lightning round, the Mad Money host told viewers the stock is headed higher.
“The stock is going higher,” Cramer said when asked about the online used car retailer. “I have been behind this stock since it was a teenager, and I’m continuing to do so.”
Cramer praised CEO Ernie Garcia, saying he has a better business model than competitors. The endorsement comes as Carvana shares continue their staggering climb from near-death to Wall Street darling.
The numbers tell a wild story. Carvana stock has rocketed 8,959.2% over the past three years. That’s not a typo.
Carvana Co., CVNA
In more recent timeframes, shares are up 128.3% year to date. The past month alone brought a 38.8% gain. Last week added another 14% to the price.
This turnaround follows an earlier period when many questioned whether Carvana would survive at all. The company faced crushing debt and operational challenges. But aggressive cost cutting and balance sheet restructuring changed the narrative.
Record Sales Drive Revenue Growth
The operational performance backs up some of the stock enthusiasm. Carvana sold 143,280 retail units in Q3 2025. That’s a company record and represents 41% growth year over year.
Total revenue hit $4.84 billion in the quarter, up 42% from the prior year. The Optimist Fund highlighted these figures as “record highs across nearly every key financial metric.”
Free cash flow reached $520 million in the latest twelve-month period. Analyst projections suggest this could grow to $3.4 billion by 2029. Some estimates push that figure toward the mid-$5 billion range by 2035.
Valuation Concerns Mount
Here’s where things get interesting. Despite Cramer’s confidence, valuation metrics paint a different picture.
Simply Wall St’s analysis gives Carvana a value score of 0 out of 6. Their Discounted Cash Flow model pegs fair value at $321 per share. That suggests the stock is overvalued by 41.8% at current levels.
The PE ratio tells a similar story. Carvana trades at 102.5x earnings. The specialty retail industry average sits at just 20.3x.
Even after adjusting for growth potential and risk, Simply Wall St’s Fair Ratio framework estimates Carvana should trade at 42.1x earnings. The actual multiple is more than double that.
Investors are clearly betting on future execution. The market has priced in very optimistic assumptions about Carvana’s ability to maintain growth and improve margins.
Free cash flow projections form the basis of many bullish cases. But those projections require Carvana to execute flawlessly in a competitive market.
The stock’s recent performance shows how quickly sentiment can shift. From existential crisis to cautious optimism, every piece of news about leverage or unit economics has moved the needle.
Cramer acknowledges the stock may not continue its straight-line ascent. “It may not just continue to go higher because it just had a huge run,” he said.
But his long-term conviction remains intact. He’s stuck with Carvana since the stock was trading in the teens.
Analysts forecast continued revenue growth as the company scales. Whether the current valuation proves justified depends on Carvana delivering on those projections.
The company sold 143,280 vehicles in Q3 2025 at a 41% growth rate with total revenue reaching $4.84 billion.
