Looking back on 2023, Carvana’s stock fell from split-adjusted $69 to $.81 (that is 81 cents). What caused this downhill plummet?
Management will tell you it was growing pains. Over leveraged debt, inefficient process, and operational challenges.
The reality is the near extinction of Carvana stemmed from inflation. As core CPI hit 5-6% Carvana’s profit on loans and vehicles dried up.
The car business is cyclical and highly competitive, but Wall street has priced Carvana like a tech stock with a x42 price to earnings ratio.
If Consumer CPI continues it’s parabolic rise, the math on Carvana does not work.
Positions and Disclosure: I am a retail trader and not a financial advisor. I hold open puts against Carvana
Bflo-Retail