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Carvana Climbs Despite WSB Ranking Dip to 10th with Stellar Q3 Performance and Stock Surge

Stock SpotlightFriday, Nov 1, 2024 7:02 am ET

1min read

Carvana, a notable player in the online used car retail market, has recently dropped to the 10th position in the latest WSB rankings, falling two spots from its previous placement. Nevertheless, the company's stock has shown significant upward momentum, increasing by 19.29% and reaching the highest intraday price since December 2021.

Carvana has reported a stellar third-quarter performance that exceeded expectations, with the company's adjusted EBITDA reaching $429 million, far surpassing analyst predictions of $326.8 million. This impressive financial outcome reflects the company's success in executing cost-cutting measures and operational optimization over the past two years.

Facing challenging financial conditions only a couple of years ago, Carvana managed to avert potential bankruptcy through strategic decisions, including reducing its indebtedness by $1.3 billion and renegotiating terms to extend the payment of certain cash interests. This decisive financial maneuvering alongside CEO Ernie Garcia's increased stake in the company has offered Carvana the breathing room necessary to refocus on expanding its used car sales.

The enhanced financial performance is also driven by Carvana's efforts to lower the per-car overhead from $6,300 to under $3,800, demonstrating the company's commitment to reducing costs while maintaining growth. The ongoing strength in sales volumes indicates a resilient demand in the automotive market that Carvana is capitalizing on effectively.

Despite the upbeat earnings report, Carvana is cautioned by analysts as the company still poses high financial risks owing to its considerable financial leverage and the intrinsic challenges within the automotive retail sector. The business anticipates a substantial increase in profitability for 2024, projecting noteworthy improvements beyond previously set targets.

As it optimistically looks towards the future, Carvana aims to leverage its extensive properties to support over 3 million retail car sales annually, while its strategic infrastructure investments promise to catalyze further growth. Ernie Garcia emphasizes that, although progress is evident, there is much left to accomplish, highlighting ongoing development of the business's competitive advantages.

Comments

Post

foo-bar-nlogn-100

11/01

$CVNA $230.00

Longjumping_Rip_1475

$CVNA seems to be quite weighty at the moment.

floorborgmic

If the market takes a downturn, what will happen to $CVNA? Will it drop even more?

VirtualLife76

$CVNA The books are cooked and it's no secret. This company is headed for a crash and will soon be back at USD 10. Don't miss my point: This isn't how businesses should be run. Every transaction between father and son is marked up significantly.

falcongrinder

$CVNA sold a put for a 4k profit. There's still a long way to go, though. This company is total garbage.

Nichix8

$CVNA it was a Ponzi scheme back then, and it's still a Ponzi scheme now. https://seekingalpha.com/instablog/767332-clastic/5659699-carvana-ponzi-collapsing?source=acquisition_campaign_google&campaign_id=21768381994&internal_promotion=true&utm_source=google&utm_medium=cpc&utm_campaign=21768381994&utm_term=169799608524^aud-2273285137610:dsa-1485125212058^^715447229903^^^g&hsa_acc=5428037747&hsa_cam=21768381994&hsa_grp=169799608524&hsa_ad=715447229903&hsa_src=g&hsa_tgt=aud-2273285137610:dsa-1485125212058&hsa_kw=&hsa_mt=&hsa_net=adwords&hsa_ver=3&gad_source=1&gclid=EAIaIQobChMIl76WlaO7iQMVmZ1aBR2O3RxuEAAYASAAEgK_PPD_BwE

deejayv2

$CVNA Time to expose their false claims. They're saying $7k for a used car? Don't believe it.

Surfin_Birb_09

$CVNA saw gains of around $230 today.

George Bennett

$CVNA...folks lining up to cash out today...lookout for a significant downturn.

acg7

$CVNA They're going to close it above 250 and eliminate all puts, ha!

HobbyLegend

@Gofast91 @vacationman49 To manage risk, I keep my overnight exposure limited. $CVNA is one of the most overvalued stocks on the planet, but with a thin float, it can swing 50 points either way in no time. I'm going in flat and plan to short rallies in this name. It's up to you to decide your own course of action, considering factors like risk, portfolio size, position size, and your ability to withstand potential squeezes at the wrong times. Best of luck! If I trade here today, I'll post an update.

EX-FFguy

$CVNA Carvana's Q3 results have surpassed expectations, delivering EPS of 64 cents and a historic adjusted EBITDA of $429 million. This has led to a 20% stock rise. Can this positive trend sustain as the company tackles the competitive used car market? https://folikoinsights.com/article/CVNA/2024/11/01/carvana-exceeds-q3-expectations-with-strong-earnings-and-revenue-growth-boosting-investor-confidence?cid=SD1KPkrofm4GLUg0

Outrageous_Kale_3290

$CVNA $234 at EOD

k_ristovski

A valuable perspective in a sea of short-term thinking This comment from a post about Carvana really hit home for me. At the time, Carvana was trading around $4-$10/share, and the general consensus on this sub was that if the price was above $0, then Carvana was overvalued. Now, I understand that this may seem like a foolish argument, but it actually highlights a common misconception among many investors. The truth is, every single company in the world is worth buying at the right price. The question is, what's the right price? And that's where good fundamental analysis and a high IQ come in. But let's be real, if you don't have the right mindset for value investing, all of that knowledge and skill are essentially useless. So, the next time you find yourself making judgments based on short-term thinking or market sentiment, take a step back and remember this: good fundamental analysis and high IQ are only half the battle. The other half? Staying true to your value investing principles, no matter what.