Carvana Co. (CVNA)

Carvana (CVNA) stock declined by 8.92% due to an analyst downgrade from Raymond James. The downgrade to Underperform was attributed to affordability concerns and skepticism about near-term growth prospects amidst high inflation and interest rates.

• Reasons for Downgrade: According to Raymond James analysts, the "good news" surrounding Carvana seems to be already priced into the stock, with potential threats to growth stemming from consumers' affordability challenges in purchasing cars. The recent spike in borrowing costs, beginning in 2022, has further exacerbated these concerns, prompting the downgrade from "market perform" to Underperform.
• Market Reaction and Analyst Sentiment: The downgrade from Raymond James, coupled with broader market uncertainty, resulted in a sharp decline in Carvana's stock price, with a 6% drop observed in the afternoon session. Despite Carvana's impressive performance over the past year, with a nearly 400% gain, analysts remain cautious about its future prospects. Currently, the consensus rating for CVNA stock is a hold, with one buy, nine holds, and three sells, including the Raymond James downgrade. The average price target of $40.33 suggests nearly 25% downside risk from current levels.

Shares of Carvana Co. Class A (CVNA) dropped by 10.56% from $37.87 to $33.87 in the trading on Thursday, October 12, 2023. The reason why CVNA stock down include:

• Higher-than-expected CPI: On October 12, a report revealed that September's Consumer Price Index (CPI) inflation came in at 3.7%, surpassing expectations of 3.6%. Core CPI inflation stood at 4.1%, in line with expectations. This higher inflation raised concerns among investors about a potential interest rate hike by the Federal Reserve, leading to a broader decline in the stock market, including AMR stock.
• Downgrade rating": Exane BNP Paribas analyst Chris Bottiglieri downgraded Carvana from an **Outperform rating to a Neutral rating. This downgrade disappointed investors.

Shares of Carvana plunged 7.98% on Wednesday trading as investors seemed to focus their attention on the updated Fed forecast calling for another rate hike this year and tempering its expectations for rates to come down next year, essentially saying they would stay higher for longer. That is likely to weigh on Carvana as used car demand is sensitive to interest rates.

https://www.fool.com/investing/2023/09/21/why-carvana-stock-was-falling-this-week/

Carvana Co (CVNA) shares are trading lower by 8.57% to $47.50 Tuesday. Carvana shares have also been volatile amid the ongoing United Auto Workers (UAW) strike. A strike impacts production at large automakers and potentially drive used car prices higher.

https://www.benzinga.com/news/23/09/34733742/whats-going-on-with-carvana-shares

Carvana saw a sharp drop of up to 16.25% in its stock on Thursday due to analyst downgrades and concerns of rapid valuation increase. By 3 p.m. ET, shares were down 14.8%. Despite strong second-quarter financial results, including impressive gross profit per vehicle at $6,520, positive adjusted EBITDA, and a debt restructuring deal, Carvana still reported a net loss of $105 million. The stock downgrade by RBC is further impacting share prices, highlighting long-term challenges for the company.

https://www.fool.com/investing/2023/07/20/why-carvana-stock-got-crushed-today/

Carnava shares (CVNA) dropped 8.17% today results from previous signals. The stock's winning streak ended largely on Friday morning, when a Forbes report suggested that one of Carvana's former vendors was stealing from the used-car retailer through duplicate invoice billings. Six months ago it was generating bankruptcy chatter, and it has largely overcome those obstacles. Carvana has more than $9 billion in total debt on its balance sheet, and analysts don't see it turning a profit until 2027. After the big surge its stock experienced, it would be a shock if it doesn't go for a secondary stock offering. Printing new shares would hit the stock, but it will regret not going that route if the shares continue to give back its recent gains.

https://finance.yahoo.com/m/e8f797a3-dd15-3275-b719-0c759f6f2b3a/3-stocks-to-avoid-this-week.html

CVNA's stock fell 16.17% following a new report by Forbes suggesting that the company may have conducted an inappropriate business relationship with its former repair vendor, HyperSport Industries. The employees stated that Carvana's improper incentive structure allowed HyperSport to duplicate invoices and enhanced dependence on this vendor for repairs and supplies.

https://www.fool.com/investing/2023/06/23/why-carvana-stock-is-plummeting-today/

CVNA's stock fell 21.3% after analysts expressed doubt about the company's positive financial outlook. They attributed the promising guidance to accounting practices and one-time events while highlighting the company's search for alternative methods to raise capital to address its substantial debt burden.

https://www.fool.com/investing/2023/06/09/why-carvana-stock-is-plummeting-today/

CVNA's stock fell 10.20% due to an unusual put option trade in the company. On May 19, 2023, ET an unusually large $903.60K block of Put contracts in CVNA was bought, with a strike price of $12.50 / share, expiring in 91 day(s). There are 459 funds or institutions reporting positions in Carvana Co., decrease of 95 owner(s) or 17.15% in the last quarter. Total shares owned by institutions decreased in the last three months by 8.99% to 122,214K shares.

https://www.nasdaq.com/articles/unusual-put-option-trade-in-carvana-co.-cvna-worth-%24903.60k

Carvana falling related to its financial problem due to a weak balance sheet. CVNA knows it has a serious debt problem: interest expense increased from $64 million in the first quarter of 2022 to $159 million in the first quarter of 2023. Not only is that a massive jump, but interest expense alone ate up around 46% of the used auto dealer's gross profit.

https://www.fool.com/investing/2023/05/13/where-will-carvana-stock-be-in-5-years/