09:07 AM EST, 11/24/2025 (MT Newswires) -- Carvana ( CVNA ) is likely to reach a "leading" market position by unit volume in the fourth quarter of next year after delivering strong growth for several quarters, Wedbush Securities said in a Monday client note.

The online used car retailer is seeing a favorable shift in momentum in recent weeks and is expected to exceed rival CarMax's ( KMX ) quarterly used vehicle volumes about six months earlier than initially projected, according to Wedbush. Wall Street is estimating Carvana ( CVNA ) to deliver about 187,000 used car units in the fourth quarter of 2026, above the 170,000 units forecast for CarMax ( KMX ), the brokerage said.

Wedbush believes the operational and technology-driven improvements Carvana ( CVNA ) has made over the past several quarters are enabling the company to record sustainable growth ahead of the market. The brokerage's analysts, including Scott Devitt, see the company achieving 3 million in annual retail unit sales by 2033 and delivering a unit sales compound annual growth rate of 23%.

Wedbush highlighted Carvana's ( CVNA ) ability to deliver annual margin expansion amid sustained improvements in gross profit per unit and operational costs.

For the fourth quarter, the brokerage estimates Carvana ( CVNA ) to record revenue of $5.2 billion, up 3% from its previous forecast, and used unit growth of about 36% year over year. The current consensus on FactSet is for revenue of $5.18 billion for the quarter. For the full-year 2025, the brokerage expects the company to report revenue of $19.9 billion, compared with the Street's view of $19.88 billion, supported by used unit sales growth of 41%.

Wedbush upgraded Carvana's ( CVNA ) stock to outperform from neutral and lifted its 12-month price target to $400 from $380.

Shares of the company have dropped about 13% over the past month, with Wedbush attributing the decline to the "underwhelming near-term performance" from CarMax ( KMX ) and broader concerns about credit markets. The stock was up 3.4% in Monday's most recent premarket activity.

"We believe the recent pullback in shares is overdone, and investors should take advantage of this period of relative weakness," according to Devitt. "We think the risk/reward is compelling, with our valuation and analysis implying limited downside from here."