The Known Unknowns: Carvana Shares Spike as JPMorgan Increases Confidence in Stock
Shares in e-commerce car sales platform Carvana (Nasdaq: CVNA) spiked on Monday, reaching $40.04 – an increase of 13.75% – in afternoon trading. The surge was attributed to JPMorgan upgrading the stock from neutral to underweight, stating that the “known unknowns” around the Carvana story are better appreciated by investors today.
JPMorgan analyst, Rajat Gupta, said, “We believe Carvana’s approach to retailing used vehicles had given it a multi-year head start in the online-only space of a fragmented used vehicle industry, allowing it to expand at a rapid pace, though this came at a cost that has now come to hurt during a sharp pull-back in industry volumes due to higher rates and higher prices.”
The analyst also commented that Carvana can “execute its way through the uncertain macro and used car industry phase in a way that limits downside to estimates.”
Carvana has made recent investments in its infrastructure and network that could give it a long-term competitive advantage. In May 2022, the company completed a $2.2 billion acquisition of ADESA Inc.’s US physical auction business which included 56 ADESA locations.
The company’s same-day delivery service is currently available to customers in Arizona, Indiana, North Carolina, Georgia, Dallas-Fort Worth. In November 2023, Carvana announced that the service will be available to customers in Central Florida. Carvana has stated it plans to continue this growth, extending same day delivery to more locations across its nationwide footprint. This rapid expansion is made possible by Carvana’s extensive infrastructure, which includes a widespread network of inspection and reconditioning centers, an efficient logistics fleet, and a streamlined digital purchasing and underwriting process that has significantly simplified and accelerated the online car buying experience.
About Carvana
Carvana is an industry pioneer for buying and selling used vehicles online. As the fastest growing used automotive retailer in U.S. history, its proven, customer-first ecommerce model has positively impacted millions of people’s lives through more convenient, accessible and transparent experiences. Carvana.com allows someone to purchase a vehicle from the comfort of their home, completing the entire process online, benefiting from a 7-day money back guarantee, home delivery, nationwide inventory selection and more. Customers also have the option to sell or trade-in their vehicle across all Carvana locations, including its patented Car Vending Machines, in more than 300 U.S. markets. Carvana brings a continued focus on people-first values, industry-leading customer care, technology and innovation, and is the No. 2 automotive brand in the U.S., only behind Ford, on the Forbes 2022 Most Customer-Centric Companies List. Carvana is one of the four fastest companies to make the Fortune 500 and for more information, please visit www.carvana.com and follow us @Carvana.
