Shares of Carvana Co. (CVNA) surged 5.70% in pre-market trading on Thursday, following the online used-car retailer's impressive first-quarter earnings report and a series of analyst upgrades. The company not only beat Wall Street expectations but also demonstrated significant growth in vehicle sales and revenue, while providing an optimistic outlook for the future.

Carvana reported earnings of $1.51 per share for Q1 2025, substantially surpassing the analyst consensus estimate of $0.60. The company's quarterly sales reached $4.23 billion, exceeding the analyst estimate of $3.98 billion and marking a 38.26% year-over-year increase. Notably, Carvana sold a record 133,898 retail units in Q1, up 46% from the previous year.

CEO Ernie Garcia expressed confidence in Carvana's future, stating that the company is well-positioned for even stronger financial performance and larger scales. The company expects sequential growth in both retail units sold and adjusted EBITDA in the second quarter and remains on track for significant growth in fiscal year 2025. Additionally, Garcia hinted that potential tariffs on new cars could benefit the used car market, potentially giving Carvana an edge in the competitive automotive retail landscape.

Following the strong results, several analysts raised their price targets for Carvana. Piper Sandler increased its target to $315 from $230, while RBC Capital Markets raised its target to $340 from $320. BTIG analyst Marvin Fong maintained a Buy rating on Carvana and raised the price target to $330.

The positive sentiment surrounding Carvana's performance and outlook, coupled with the potential benefits from new car tariffs, has contributed to the stock's pre-market surge. Investors appear to be optimistic about the company's growth trajectory and its ability to capitalize on the current market conditions in the used car industry.