Remember when buying a used car meant spending an entire Saturday getting grilled by a salesman in a cheap suit while pretending you weren’t terrified of hidden rust?
Yeah, those days feel almost prehistoric now.
One company has been quietly (well, not that quietly if you follow the stock) turning that entire experience on its head, and Wall Street is finally sitting up and taking serious notice. A major global bank just came out swinging this week with a brand-new Buy rating and a price target that has plenty of investors doing double-takes.
The Big Call That’s Turning Heads
Analysts at a top-tier investment bank just initiated coverage on the online used-car giant with a Buy rating and a 12-month price target of $450. That represents roughly 20% upside from where shares closed last Friday, and it’s one of the most aggressive targets on the Street right now.
More importantly, they didn’t just slap a number on it and call it a day. Their note is packed with phrases like “true disruptor,” “share gainer,” and “best-in-class customer experience.” When analysts who normally speak in measured monotones start sounding almost excited, you pay attention.
A Market That’s Still Shockingly Fragmented
Here’s something that still blows my mind: the used-car industry in the United States is worth well over $1 trillion annually, yet no single player owns more than about 3% of it. Think about that for a second. It’s one of the largest retail categories on the planet, and it’s basically a collection of thousands of local dealerships, mom-and-pop lots, and the occasional regional chain.
That kind of fragmentation screams opportunity for anyone who can bring real scale, technology, and a dramatically better customer experience. And according to these analysts, that “anyone” is the company with the giant car-vending machines you’ve probably seen on social media.
“We see a differentiated, best-in-class online platform and customer experience that positions them to gain share in the large but fragmented used-vehicle market.”
They currently estimate the company controls roughly 1.5% of total U.S. used-vehicle retail sales. By the end of the decade they think that can grow to around 4%. And if management hits their very public long-term goal of selling three million vehicles a year? That share could balloon toward 8% or more.
Eight percent might not sound earth-shattering until you realize that would make them bigger than the five largest traditional dealership groups combined.
It’s Not Just About Selling Cars Online
A lot of people still think this is simply “Amazon for used cars,” but that sells the model short. Yes, the entire purchase can happen from your couch, and yes, they’ll deliver it to your driveway or let you pick it up from one of those Instagram-famous vending machines. But the real magic is happening long before the customer clicks “Buy.”
Every vehicle goes through a rigorous 150-point inspection. Photos are studio-quality from every conceivable angle (including under the hood and underneath the car—try getting that at most dealerships). Pricing is non-negotiable and, crucially, almost always lower than comparable cars at traditional lots because the company cuts out layers of middlemen.
- Transparent pricing with no last-minute “doc fees” surprises
- 7-day money-back guarantee (drive it, live with it, change your mind)
- All paperwork handled digitally—sign on your phone in minutes
- Financing rates that routinely beat local credit unions
When you stack all of that up, it’s no surprise customer satisfaction scores are through the roof. In my experience covering growth stories, when a company obsesses over removing every single point of friction in an old-school industry, magic tends to happen.
The Profit Engine That Keeps Getting Better
Here’s the part that really got the analysts excited: gross profit per unit (GPU) is already running roughly double the industry average, and they see plenty of runway for that number to keep climbing.
How? Massive investments in inspection and reconditioning centers (IRCs) are starting to bear fruit. These facilities let the company refurbish vehicles faster, cheaper, and to a higher standard than the typical dealership body shop. Add in the ongoing integration of the ADESA auction platform they bought out of bankruptcy a couple years ago, and suddenly they have a fully vertically integrated machine.
Buy wholesale → recondition in-house → retail direct to consumer. Each step captures margin that used to leak out to third parties.
The analysts believe these efficiencies will not only provide enough capacity to hit that three-million-unit long-term target, but actually do it profitably at ever-higher GPUs. That combination—volume growth plus expanding unit economics—is the holy grail for any retailer.
Valuation: More Tech Than Traditional Auto Retail
Perhaps the most interesting part of the note is how they’re thinking about valuation. Because this company straddles two worlds—traditional auto retail and high-growth internet marketplaces—the analysts argue it deserves a multiple well above legacy dealership chains yet still below pure-play internet giants.
That middle ground actually gives them quite a bit of room. Traditional auto retailers trade around 8-10x forward earnings. High-growth e-commerce names can trade 40-60x. Landing somewhere in the 20-30x range (where many analysts already have it) suddenly makes that $450 target look pretty reasonable.
Shares are already up more than 80% year-to-date, yet the analysts’ work suggests the re-rating still has legs as the market digests just how large this opportunity really is.
Risks? Of course There Are Risks
I’d be doing you a disservice if I painted this as a straight line higher. Used-car prices have been falling for two years straight, interest rates are still elevated (making car loans more expensive), and the company carries a meaningful debt load from its near-death experience in 2022.
But here’s the thing: management has already proven they can navigate brutal conditions. They slashed expenses, refinanced debt at better terms, and emerged with a cost structure the competition can only dream of replicating. The balance sheet is in the best shape it’s been in years, and free cash flow is finally turning positive.
When a company shows it can survive a near-bankruptcy scare and come out leaner, meaner, and focused, I tend to give the management team the benefit of the doubt on execution risk.
Where This Could Go in the Next Decade
Let’s play this out. If the company really does reach three million units sometime in the early 2030s at, say, $4,000–$5,000 GPU, you’re looking at $12–15 billion in gross profit. Apply even a conservative 20x multiple and you’re talking about a market cap north of $250 billion. That’s roughly 6x–7x today’s value.
Impossible? Maybe. But Amazon was once a $1.5 billion online bookstore that people laughed at for losing money every quarter. Disruption at this scale doesn’t happen often, but when it does, the rewards can be staggering.
I’m not saying Carvana is the next Amazon (few companies are), but the parallels are hard to ignore: massive fragmented market, terrible legacy customer experience, technology eating the world one industry at a time.
Sometimes the most obvious ideas are the best ones. And making car buying pleasant, transparent, and cheaper feels pretty obvious in 2025.
Whether you’re a potential car buyer looking for your next ride or an investor hunting the next multi-bagger, this is one of those stories worth keeping on your radar. The analysts at UBS certainly think so—and their $450 target suggests they believe the party is just getting started.
Disclosure: No position at the time of writing, but I’ve been watching this name closely for years and wouldn’t be shocked to see that change soon.
