Carvana surpassed Wall Street's Q3 expectations and subsequently raised its 2024 earnings guidance.

• Carvana updated its 2024 earnings forecast, predicting it would surpass the upper limit of its earlier projection.
• Wall Street's estimates for earnings and revenue were easily surpassed by the online used-car retailer.

After significantly exceeding Wall Street's third-quarter expectations, Carvana raised its 2024 earnings guidance on Wednesday.

In contrast to average estimates compiled by LSEG, here's how the company fared in the third quarter.

• Earnings per share: 64 cents vs. 25 cents expected
• Revenue: $3.65 billion vs. $3.45 billion expected

The company's stock rose roughly 20% in after-hours trading Wednesday.

Carvana expects its adjusted earnings before interest, taxes, depreciation and amortization for 2024 to be "significantly above the high end" of its previous target of $1 billion to $1.2 billion. The company reported $339 million in adjusted EBITDA last year.

Carvana anticipates a rise in retail vehicle sales in the fourth quarter, surpassing the 108,651 vehicles sold in the previous three months.

In the third quarter, the company's net income decreased from $741 million to $148 million, due to a reduction in gains from debt reduction. However, the adjusted EBITDA was $429 million and the adjusted EBITDA margin was 11.7%, both surpassing the company's previous records set in the second quarter.

The adjusted EBITDA for the company in the third quarter of 2023 was $148 million, while the revenue for the same period was $2.77 billion.

Carvana's shares have increased by approximately 300% in 2022 due to operational restructuring and cost reduction measures following concerns of bankruptcy from Wall Street in late 2022.

On Wednesday, Carvana's stock closed at $207.31 per share, a slight decline of less than 1%, despite hitting a new 52-week high of $213.98 earlier in the day.