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CarvanaCVNADON'T BUYJun 05, 2023
Stockchase InsightsStock price when the opinion was issued
As of Jun 11, 2026. Market Open.
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Premium contentRecord 2025 results with 43% retail unit growth, $951M net income, and strong customer satisfaction. Outlook for 2026 is for continued significant growth in units sold and Adjusted EBITDA, supported by expanded infrastructure and operational efficiencies. Social media mentions are up 1217% in the past 24h.
He bought at $306. It's more about AI disruption, but the recent Gotham City research note about CARV overstating earnings. Tariffs are a strong tailwind, because tariffs are built into the price of cars. Revenues are $5 billion and $1.26 EPS.
Joe TerranovaHe was wrong about this. He bought it on Oct. 31 skeptically, but is up 43% since then. Interest rates are a macro challenge, but they are executing. They will soon join the S&P.
Joe TerranovaCVNA has bounced back nicely in the past few years. Growth expectations are for 20%+ in the next few years, and analysts expect margin expansion. Analyst estimate trends are rising, it is now profitable, and it generates a healthy amount of free cash flow, most of which is used for buybacks. It trades at a high valuation of 82X forward earnings, but we feel this can compress if earnings continue to grow at a rapid pace. We think it looks interesting here, and would be comfortable buying today while acknowledging its high risks and volatility.
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Premium contentPremium contentSimply put, carvana is a better way to buy a car. you can browse, finance, and purchase a car online and have it delivered to you as soon as the next day. cutting out the dealerships translates to thousands of dollars in lower costs on every vehicle we sell. we pass these savings on to consumers in four ways: lower prices (our customers save $1,681 on average vs. kelley blue book), premium cars, a better experience, and no hidden fees. Social media mentions are up 1150% in the past 24h.
Moving up in a step pattern -- rallies, consolidates at the higher level, rallies, consolidates. A fantastic accumulation pattern, extremely well supported. Now consolidating. As long as it holds above $100 support, it's still being accumulated.
The 5-year chart is very interesting. Massive selloff, huge multi-year base, and now it's broken out. Looking at where it was, looks like it's just getting started longer term.
CVNA has recovered quite well this year, after a substantial drawdown of around 90% from its peak in 2021 and it is now trading at 0.2x times' Price/Sales (as the company has negative EBITDA, earnings and even book value). Growth was more than 100% in COVID years but went substantially to even negative growth in recent quarters. The balance sheet is highly leveraged with $8.2B of net debt while still burning cash. Overall, the company was growing really fast in the COVID years, with the promise to become the leader of used cars. However, the company is still unprofitable, burning cash quite significantly, highly leveraged, and may need to raise additional capital in tough times. We consider the share price highly volatile, and we would prefer to wait until profitability has been achieved. The company came precariously close recently to going under, and the short position remains more than 50%. Too risky for us.
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