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Carvana heads into its October 28 earnings print with short sellers rebuilding positions, the stock down 13% over the past month, and analysts trimming targets while holding their buy ratings.
Short interest is the clearest signal this week. It has climbed 7% in seven days to 47.3% of free float, a level that makes Carvana one of the most heavily shorted names in the US market. The jump was concentrated: shares short surged from roughly 62.2 million on October 7 to nearly 67 million by the end of the week, a build of more than 4.7 million shares in two sessions. Days to cover, per FINRA's fortnightly data, is 7.92, meaning unwinding the position would absorb nearly eight days of average volume. That is a meaningful structural overhang.
The borrow market, however, tells a different story from the short interest level. Availability is extremely loose at 898% of short interest, meaning there are roughly nine shares available to borrow for every one currently lent out. This is far above the 52-week trough of 122%. Cost to borrow is just 0.49%, up 13% on the week but still negligible in absolute terms. Short sellers face no squeeze pressure from the lending side: the position is large, but building it costs almost nothing and the pool of available shares is vast. The ORTEX short score has edged up to 56.9, its highest reading of the past two weeks, consistent with the rebuilding trend in SI.
Options positioning reinforces the cautious tone without amplifying it. The put/call ratio is running at 1.09, almost exactly in line with its 20-day average of 1.08, producing a z-score close to zero. Puts outnumber calls by a modest margin, but the ratio is nowhere near the panicked levels the 52-week high of 8.58 represents. Options traders are defensively positioned but not in an extreme way, suggesting the sentiment expressed there is measured rather than urgent.
The analyst community is maintaining positive ratings but trimming price targets into the weakness. Barclays cut its target from $93 to $80 on October 6, keeping Overweight. Stephens & Co. moved from $91.50 to $83 the same day, also maintaining Overweight. BTIG held at $87 with a Buy reiteration on October 9. The consensus mean target is $82.29 against a current price of $60.39, implying roughly 36% upside. One entry in the recent changes warrants a caveat: Oppenheimer's September 30 target adjustment from $450 to $90 almost certainly reflects a prior-period stale figure rather than a genuine cut of that magnitude, and should not be read as a single-analyst move. Across the group, the direction is consistent: the Street remains bullish on the name but is bringing targets lower as the used-car backdrop softens.
The bull and bear cases are well-defined. Bulls point to 45% year-on-year monthly unique visitor growth in Q3 2026, a retail unit estimate of 207,500 for the quarter, and an AI-driven cost-reduction flywheel that the Street believes is still early in its impact. Bears counter with six consecutive months of falling wholesale prices, a $638 decline in used-car list prices since June, and deteriorating securitisation economics, with excess spread down 66 basis points and the over-collateralisation target rising 50 basis points, pressuring gain-on-sale margins. The PE multiple has compressed roughly 5.6 points over the past 30 days to 28.5x, and the price-to-book has fallen more than 1.7 points to 8.2x, suggesting the market is already repricing the bear case to some degree.
On the 13D register, Ernest C. Garcia II, Carvana's founder and executive chairman, holds a 22.9% stake under a Schedule 13D/A filed in May 2026, down from 23.9% previously. His son, CEO Ernest C. Garcia III, is listed at 18.2% in a separate 13G filing. Combined, the Garcia family retains close to 40% economic interest. Garcia II's 13D status is worth noting: it signals active rather than passive intent at the 5% threshold, though the caveat applies that these stakes are as last disclosed and holders dropping below 5% may exit without a further filing. Capital Research and Management added nearly 17 million shares in the quarter to September 30, lifting its holding to 14% of shares outstanding, making it the largest institutional holder on record. Insider activity in the recent period is dominated by compensation mechanics and planned sales under 10b5-1 programs, including CFO Mark Jenkins exercising options and selling shares on October 1. These are pre-arranged trades and carry limited signal on conviction.
The last two earnings prints produced a drop of 7% on the day and a 6.4% gain the day after the prior quarter, suggesting the stock can move sharply in either direction. With 14 days to the October 28 release, the key question is whether the deceleration in used-car prices and the securitisation headwinds have shown up in margins, or whether unit volume and cost efficiency have offset the pricing drag.
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