Connect with us

Hi, what are you looking for?


Carvana stock price analysis: Is CVNA a good investment now?

Carvana (NYSE: CVNA) stock price popped to $9 after the company published strong financial results. The shares jumped by over 25% after the company’s revenue beat the consensus estimate. Still, shares of the fallen angel have crashed by over 97% from their all-time high.

Carvana earnings download

In a report, Carvana said that it sold 79,240 cars in the first quarter, which was about 25% lower than what it sold in the same quarter in 2022. This decline happened because of reduced advertising, inventories,, and the rising interest rates. Also, the company decided to focus on profitability and not growth at all costs.

Carvana’s revenue came in at $2.6 billion, which was lower than what it made in the same quarter in 2021. The company also cited ADESA as one of its key pillars since it is helping it save cash in transport. In the last quarter, the company saved an average $200 per vehicle in transportation.

Despite the strong results, Carvana faces significant challenges ahead. The biggest challenge is its huge debt load, which is affecting its business. Most of this debt came with the acquisition of ADESA in 2022. In a statement, the company said that it had $3.5 billion in liquidity, made up of $1.5 billion in cash and $2 billion in unpledged real estate.

Last week, Bloomberg reported that Carvana’s creditors had agreed to swap its debt for equity. As part of the deal, some bondholders will allow the firm to pay some of its interest with additional debt. Another approach is to allow the company to move its existing unsecured positions into a new first-lien debt. That plan is expected to save Carvana $1 billion in interest per year.

Therefore, there is a likelihood that Carvana will avoid going bankrupt as most analysts were expecting in the near term. Also, the company could benefit if the Fed pauses its rate hikes.

Carvana stock price forecast

CVNA chart by TradingView

The 4H chart shows that the CVNA share price dropped to the key support at $6.52 this month. This was an important level since it coincided with the lowest point on March 15. It seems like the shares have formed an inverted cup and shoulders pattern, which is usually a bearish sign.

Therefore, while Carvana is making progress fundamentally, I believe that it has more downside going forward. This view will be confirmed if the shares manage to move below the key support level at $6.72. If this happens, the next level to watch will be at $5.

However, a clear move above the upper side of the inverted C&H pattern at $10 will signal that there are still more buyers in the market.

The post Carvana stock price analysis: Is CVNA a good investment now? appeared first on Invezz.

    You May Also Like


    On the surface, index and stock options are very similar. Still, there are some differences that traders should be aware of. Understanding these differences...

    Latest News

    The FBI was not forthcoming with the Trump, Biden and Pence classified documents during a House Intelligence Committee briefing last week, and lawmakers still...

    Editor's Pick

    iBASIS and Sequans have been selected by Actility to meet its delivery schedule for eSIM and iSIM iBASIS and Sequans now considered frontrunners in...


    American Airlines is getting rid of its traditional frequent flyer award chart as the carrier moves toward dynamic pricing for mileage redemptions, the latest shift in its lucrative AAdvantage...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024