Is Carvana Co. overvalued or undervalued?

As of 30 July 2025, the valuation grade for Carvana Co. moved from very expensive to expensive, indicating a slight improvement in perceived value. However, the company remains overvalued based on its high valuation ratios, including a P/E ratio of 137, a Price to Book Value of 48.62, and an EV to EBITDA of 49.08. In comparison, a peer like Carvana Co. has a lower P/E ratio of 99.40, suggesting that Carvana's valuation is still significantly higher than its industry counterparts.
Despite the high valuation, Carvana has demonstrated impressive returns, with a year-to-date stock return of 85.96% compared to the S&P 500's 12.22%. This strong performance over multiple periods, including a staggering 1048.72% return over three years, highlights the market's confidence in the company's growth potential, even as its valuation metrics suggest it is overvalued.