Carvana Co (CVNA) Options

MarketWatch: Carvana gets its first upgrade since Hindenburg short-selling report

Upgrade for Carvana stock comes as Ally Financial renews loan-buying pact

Carvana, the online used-car retailer that last week was the target of a short-selling research report, got its first broker upgrade since then which says the controversy has sparked a buying opportunity.

Brad Erickson, an analyst at RBC Capital Markets, lifted Carvana's rating to outperform from sector perform, not even a week after Hindenburg Research authored a short-selling research report, in large part on worries over its ability to sell auto loans.

Carvana's stock (CVNA) is down 7% in the new year, after a meteoric 365% gain in 2024.

Carvana shares rose 4% in premarket trade.

Erickson lifted his price target to $280 from $270 as well, saying Wall Street underestimates how much Carvana will expand its market share.

He also said Carvana can profitably expand to work with more commercial and fleet buyers. It will be able to deleverage further owing to a resurgence in demand and profitably, the analyst added.

On the controversy on whether Carvana is having trouble selling the loans it originates, Erickson said the private sale of $800 million of loans last year was done on similar terms as in the past, and on Monday Ally Financial (ALLY) renewed its relationship with Carvana.

Terms call for Ally to buy up to $4 billion of loans over the next year.

RBC bullish on Carvana stock as unit upside and TAM drive opportunity

On Tuesday, RBC Capital Markets upgraded Carvana stock from Sector Perform to Outperform, increasing the price target to $280 from $270. The decision follows Carvana's remarkable recovery, with InvestingPro data showing a stunning 303% return over the past year.

The company has achieved a perfect Piotroski Score of 9, indicating exceptional financial strength. RBC Capital analysts now see the recent pullback in Carvana's stock as a buying opportunity.

The upgrade comes with a positive outlook on Carvana's business trajectory. Analysts at RBC Capital believe that Carvana's retail unit sales have the potential to exceed expectations, especially as vehicle supply conditions improve.

Supporting this optimism, InvestingPro data reveals revenue growth of 12.21% in the last twelve months, with a healthy current ratio of 3.25 indicating strong operational liquidity. They also consider the company's Gross Profit per Unit (GPU) to be largely sustainable, countering recent concerns in the market.

Furthermore, RBC Capital's analysts are optimistic about Carvana's prospects in the online car marketplace. They anticipate that the company will continue to show improvements in both margin and balance sheet strength. The analysts expect these factors to contribute to a clearer pathway toward generating real free cash flow (FCF) for Carvana.

The updated price target is based on a 28 times multiple of the firm's projected enterprise value to 2026 EBITDA, and RBC Capital has also increased their estimates for Carvana's 2025 financials. They suggest that Carvana's constrained supply business model, combined with a large and still underpenetrated total addressable market (TAM), could potentially make it an unexpected compounder over time.

RBC Capital also notes risks to their outlook, including the sustainability of GPU levels and the ability to maintain retail volume momentum. While the company trades at elevated multiples with an EV/EBITDA of 28.59, InvestingPro analysis suggests the stock is slightly undervalued at current levels.

n other recent news, Carvana Co (NYSE:CVNA). has secured a notable agreement with Ally Bank and Ally Financial (NYSE:ALLY) Inc., collectively known as the "Ally Parties," to sell up to $4 billion in automotive finance receivables. This arrangement follows an amendment to their existing Master Purchase and Sale Agreement and is expected to provide Carvana with a significant influx of capital.

The online auto retailer also reported record-breaking Q3 earnings, with a 34% year-over-year increase in retail units sold, leading to a 32% revenue surge. Carvana's net income reached $148 million, with an operating income of $337 million and an adjusted EBITDA of $429 million.

RBC Capital Markets reiterated Carvana at Sector Perform, JPMorgan reaffirmed an Overweight rating, and Needham increased its stock price target for Carvana to $330, maintaining a Buy rating on the stock.

In a significant shift, Morgan Stanley (NYSE:MS) moved from an Underweight to an Equal-weight rating for Carvana. These recent developments reflect a strong financial performance and market position for Carvana, despite some concerns raised by analysts.

https://www.investing.com/news/analyst-ratings/rbc-bullish-on-carvana-stock-as-unit-upside-and-tam-drive-opportunity-93CH-3799236

Big wealthy companies don't have uniformly smart employees.

Interesting, all the big names linked to this. JP Morgan, Ally Financial....

Yes, there've been several. But I think Carvana will eventually pay the price.

And the arithmetic where they pay the most for cars, sell them cheapest and make far more than anyone in the business.

BTW, Carvana stock rose today, but Hindenburg short targets often trade perversely like that for a time. See Icahn's company (IEG) as an example.

Yes! The stuff about the loans was very funny. Required annual income: $5,100...

Loved "anyone who can fog a mirror qualifies for their car loans."

They ARE funny...

Car Guys Look at the Carvana Story. Hilarious.

Hindenburg rarely gets short picks wrong. Brilliant and gutsy group of analysts. They think CVNA is rubbish. Read the report for yourselves...

https://hindenburgresearch.com/carvana/

Not “wrong” just timing

Perhaps it's about to speed up. Hindenburg put out a report today:

Carvana: A Father-Son Accounting Grift For The Ages

Published on January 2, 2025

https://hindenburgresearch.com/carvana/

The slow drip to reality

Sold half an bought a mountain! $$$$$!$!!!

CVNA, off the 52 week high

Good day CVNA

CVNA new 52 week high

Yes! Omg we are still holding, huge gains, i mean huge here. GL

Remember when the stock was a couple bucks a few years back BK coming blah blah this one of my great total ROI from the bottom still holding free shares. Always buy the fear and make the big $ Staggering gains and have made some nice hits on options over the last few years.

$CVNA

Oh my, $$$$$$

cvna.........................https://stockcharts.com/h-sc/ui?s=cvna&p=W&b=5&g=0&id=p86431144783

Boom 200+, wealth! $$$$$$

Cvna, stock of the year! Just amazing an still holding here from average of 18.00! Money! $$$$$$

CVNA new 52 week high

We see a forward split coming in the near future as a possibility $$$$$$$

Absolute monster of a stock! Wow!

CVNA new 52 week high

The slow drip back to what it’s really worth

CVNA new 52+week high

CVNA new 52 week high

This went from 3 to 155 and you are still not believing in this. What more do you want...300?

I haven’t shorted this… yet. I have only shorted one stock in my entire life and that was Sears.
This one actually has a better feeling to short than sears did but for some unknown reason people can’t read financials anymore or it no longer matters.

CarvanaMadoff will eventually unravel. Their fundamentals as they pertain to car sales/cost/rehab are not legitimate, in my opinion

It should be on the otc.

Carvana (NYSE:CVNA) was upgraded by analysts at Royal Bank of Canada to a "sector perform" rating. They now have a $170.00 price target on the stock, up previously from $166.00. This represents a 9.1% upside from the current price of $155.79.

This pump and dump will leave many bag holding

Another beast mode from cvna $$$$$$

Sell if u want. It appears it doesn’t matter. Loll

Open wide freshly printed shares on the way.
https://ih.advfn.com/stock-market/NYSE/carvana-CVNA/stock-news/94287685/form-424b5-prospectus-rule-424b5

$CVNA BAZINGA!! Frikken Awesome, way to go Carvana!!!

Shorts now in control but for how long

New 52 week high $$$$$$$$

Beast! Just a beast

CVNA debit spread calls up Bigly since last year
Buying more from Zapp homerun this week and adding ICCM

$CVNA

Correct. From what i heard, the Garcias are no PoopylickerBamaClinton no balls. They're more to johnwaynereaganbushmytrump balls of steel and won't take shorties, especially naked, lying down.

🤠

Once an ExCon always an ExCon waiting for the next con. Facts You can dispute

You are full of shit. The Garcias legal woes are behind them. This company will be around for a long long time. You better cover your short position before this hits $200 .

CVNA been awhile since my last message
You can’t wait to make 30% on your money
May god have mercy on your doomed ass

like i said, wen 200, 300, 500, 800? 😎