Benzinga | Oct 28, 2020 10:12AM EDT

Carvana's Earnings: A Preview

Carvana (NYSE: CVNA) announces its next round of earnings this Thursday, October 29. Here is Benzinga's everything-that-matters guide for this Thursday's Q3 earnings announcement.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Based on management's projections, Carvana analysts modeled for a loss of $0.33 per share on sales of $1.53 billion. Carvana EPS in the same period a year ago totaled $0.56. Sales were $1.09 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to report earnings in line when it publishes results Thursday, quarterly profit would be up 41.07%. Revenue would be have grown 39.73% from the same quarter last year. Carvana's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate -0.83 -0.63 -0.62 -0.40EPS Actual -0.62 -1.18 -0.79 -0.56Revenue Estimate 1.14 B 1.14 B 1.10 B 1.01 BRevenue Actual 1.12 B 1.10 B 1.10 B 1.09 B

Stock Performance

Shares of Carvana were trading at $208.29 as of October 27. Over the last 52-week period, shares are up 146.61%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Carvana is scheduled to hold the call at 17:30:00 ET and can be accessed here.