Morgan Stanley analysts see a buying opportunity in Carvana shares after a post-earnings pullback, maintaining a $450 price target that implies about 45% upside from current levels. The firm argues that the online auto retailer's growth trajectory remains intact despite near-term cost pressures that drove a weaker fourth-quarter performance.

Analyst Daniela Haigian noted that while the Q4 results are likely to trigger downward revisions in retail gross profit per unit, Morgan Stanley remains "convicted in the growth story" even with roughly one turn of multiple compression. Carvana attributed a $220 per-unit headwind in the quarter to higher reconditioning costs tied to "less-productive production sites," with management outlining a three- to six-month timeline to work through these "growing pains."

The bank highlighted "incremental conviction" in Carvana's vertically integrated financing platform, citing a stable 9.2% gain-on-sale spread and the addition of a $12 billion loan-purchase agreement that strengthens credibility in volatile markets. Morgan Stanley also pointed to improving leverage metrics, with net debt to adjusted EBITDA at about 1.2x, down from 2.8x in 2024. Haigian concluded that investors should "leverage any near-term pullback in share price as an opportunity to add to a position in a generational compounder."