Carvana Co. Class A
282.01 - 295.5
29.35 - 296.83
Echofin Members Consensus
I had exactly the same experience with CVNA but was only short with 30 shares and added 100 at $209.89. Was sitting on a decent loss when at $113 and covered in increments down to $203.13. Was happy to get out with a small profit. Feel for you Maletone and really appreciate all you do in this room.
We raise our 12-month price target by $55 to $100, based on a '21 EV/sales ratio of 1.0x. We increase our adjusted EPS estimates to ($2.25) from ($3.20) for '20 and to ($1.40) from ($2.35) for '21. CVNA issued a press release stating that it expects Q3 EBITDA to be approximately breakeven versus the consensus of negative $52.3M and negative $69 million in Q2. CVNA also said it expects to post quarterly records for retail units sold, revenue, gross profit per unit, and EBITDA margin, but we don't view record results on any of those metrics as unexpected. While the EBITDA news was a positive surprise, we continue to expect another EPS loss in Q3 and believe CVNA has benefited from trends benefiting both used vehicle and contactless transactions due to Covid-19, and believe these trends are unsustainable. Meanwhile, competitors such as CarMax have greatly accelerated their e-commerce capabilities. Concurrently, CVNA announced a $1B debt offering, a portion of which will be used to retire existing debt.