Sign InSummary
Carvana Co. (CVNA), an online used car sales company, saw a 5.84% decrease in its stock with a volume significantly lower than average, but with bullish signals from technical indicators and an improved profit outlook, the stock displays potential for growth, although caution is advised due to negative EPS and market uncertainty about future performance. [August 9, 2023]
Overview of Carvana Co. (CVNA)
Carvana Co. (CVNA) is a Nasdaq-listed company engaged in the online sale of used cars. On the most recent trading day, August 9, 2023, the company’s stock closed at $41.44, recording a 5.84% decrease. It recorded a volume of 16.64 million shares, significantly lower than its average volume of 30.15 million shares.
Technical Analysis
Carvana’s stock has varied significantly in the past year, with the year’s low at $3.55 and the high at $58.05. Nonetheless, with the stock last closing at $41.44, it shows a promising rebound from its previous low. The stock is trading above both its 50-day and 200-day moving averages, presenting a bullish signal. The 50-day Moving Average stands at $31.27, while the 200-day Moving Average is $14.39.
The RSI14 is at 41, sitting somewhat in the neutral range, indicating that the stock is neither overbought nor oversold at its current price. The stock's MACD for the past three months is also positive at 6.99, denoting the bullish momentum. However, the large Average True Range (ATR) of 12.29 signifies volatility in the stock's price. This could represent potential risks or opportunities for traders. Both its support and resistance levels are quite close to the last closing price at $38.89 and $44.02, respectively.
Fundamental Analysis
Carvana's market capitalization stands at $7.36 billion, demonstrating a fair size within their industry. We note the firm has notably negative earnings per share (EPS) of -4.184 and no price to earnings (PE) ratio due to its negative earnings. This suggests some financial instability and could mean the company is not generating enough profits or is experiencing loss.
Things, however, look promising for Carvana, as recent news shows the company upping their Q3 profit outlook, indicating strong momentum early in the quarter. Notably, the company shares hiked after the announcement of an expectant gross profit above $5,500 per unit for Q3. Despite foresighted profit, caution is advocated due to the company’s current negative EPS and some negative sentiment from recent reports.
Price Predictions
Analyst consensus has placed the expected low, median, and high stock targets at $5, $73, and $470 respectively. The wide range of these target prices indicates market uncertainty about the future performance of the stock, likely driven by the company's performance volatility.
Conclusion: Evaluation of Carvana Co. (CVNA)
Taking into account the technical indicators and recent improvements in the business, the stock displays a potential growth trend and hence could be considered for buying. However, based on the negative EPS and broad range of price targets, it is crucial for investors to be cautious. Therefore, Carvana Co. can be considered for monitoring and a 'Hold' position until more concrete signals of steady performance become evident.
