2 Things to Know About Carvana's Improved Outlook
Shares of online used car seller (NYSE: CVNA) rocketed higher last week after the company updated its outlook for the second quarter. Carvana now expects to report adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of at least $50 million, compared to a previous outlook calling for positive adjusted EBITDA. The company also sees its non-GAAP (generally accepted accounting principles) total gross profit per unit metric exceeding $6,000, which would be a new record and up 63% year over year.
While the market cheered this improved outlook, there are two very important things to know.
What is adjusted EBITDA? To calculate EBITDA, take a company's net income and add back interest, taxes, depreciation, and amortization. The "adjusted" part involves backing out even more expenses, often stock-based compensation.
Source Fool.com