Skip to content

Carvana Co. (CVNA) — WACC Analysis

WACC Breakdown

Carvana Co. (CVNA) has a weighted average cost of capital (WACC) of 13.9%. The cost of equity is 14.8%, derived from a beta of 2.88 and a risk-free rate of 5.2%. The after-tax cost of debt is 6.5%. The capital structure is 89.2% equity and 10.8% debt.

Interpretation

A WACC of 13.9% indicates that the market perceives Carvana Co. as higher-risk, requiring a greater return to compensate investors.

Investors can compare CVNA's WACC of 13.9% against industry peers to gauge its relative financing costs. A beta of 2.88 reflects the stock's volatility relative to the broader market.

DeepViews
VALUATION

CVNA WACC: 13.86% for Carvana Co.

Current inputs imply a 14.75% cost of equity and a 8.18% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
Loading market data...
[02]
WACC Calculation Process
1
Market Data Loaded
2
Company Data Fetched
3
Beta Calculated (5Y)
4
Inputs Auto-Populated
5
WACC Calculated
[03]
Step 2: Enter Ticker Symbol
Quick search:
Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Carvana Co. Common Stock (CVNA) WACC Results
Weighted Average Cost of Capital
13.86%
Cost of Equity
14.75%
Risk-Free Rate5.22%
Beta2.88
Market Risk Premium4.23%
Cost of Debt
6.46%
Pre-Tax Cost of Debt8.18%
Tax Rate21.00%
Tax Shield1.72%
Capital Structure
Equity: 89.23%($42.84B)
Debt: 10.77%($5173.00M)
Equity Component
13.16%
89.23% × 14.75%
Debt Component
0.70%
10.77% × 6.46%

Carvana Co. (CVNA) WACC in context

Carvana Co. (CVNA) currently screens with an estimated WACC of 13.86%. That blends a 14.75% cost of equity, a 8.18% pre-tax cost of debt, and a 89.23% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

What CVNA WACC implies

A 13.86% discount rate screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

How this page calculates CVNA

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 2.88 and equity accounts for 89.23% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.