Carvana (NYSE: CVNA) is in focus on Monday morning after famed investor Jim Cramer dubbed it “one of his favourite companies” heading into 2026.
In a recent segment of CNBC, the former hedge fund manager said part of the reason why Carmax has massively underperformed this year is that “CVNA has a better business model.”
Carvana stock has been on an absolute rip since early April. At the time of writing, it’s up a roughly 135% versus its year-to-date low.
Why Cramer recommends sticking with Carvana stock
According to Cramer, Ernie Garcia has done a “remarkable job” in introducing a different way of buying used cars that’s “very frictionless” compared to the typical process.
On Monday, he urged investors to let go of the narrative that Carvana is a company that once was at the verge of bankruptcy because “these guys had a resurrection.”
The NYSE-listed firm is “winning in one of the biggest markets in the world” – and that alone is reason enough to invest in CVNA shares at current levels, Cramer added.
More importantly, Carvana currently owns just 3% of the global used car market, which means the potential for growth is enormous.
“Going from 3.0% to 4.0% only could prove monstrous” for the stock, he concluded.
How high could CVNA shares fly in 2026
Cramer’s constructive view on Carvana shares echoes what Joseph Spak – a senior UBS analyst – told clients in a research note on December 1st.
Speak assumed coverage of the online used car retailer today with a “buy” rating and a $450 price target indicating potential upside of more than 20% from here.
CVNA is a “true disruptor and share gainer in a highly fragmented market,” the UBS analyst wrote, adding its e-commerce platform offers customers a “better experience and often a better price.”
According to him, the Tempe-headquartered firm could achieve its target of ~3mm units annually within the next five years as it continues to unlock savings and efficiencies to “drive higher GPUs.”
Carvana is free from the AI bubble concerns
Carvana is a differentiated name in the used car market that continues to steal share from the likes of Carmax and AutoNation.
As Jim Cramer put it, “they are doing many things right,” which will likely push the CVNA stock higher in 2026.
The best part? It’s not an AI-driven stock – it’s good old e-commerce only – which means investors don’t have to worry about speculative valuation or bubble concerns.
Carvana’s meteoric rally this year isn’t hype, it’s pure substance. Even after the cosmic surge, it’s going for less than 6 times sales, which isn’t particularly expensive heading into the next year.
That’s why Wall Street more broadly also currently rates CVNA at “overweight”.
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