CVNA - Better Stock Buy: Carvana vs. CarMax
2023-04-13 09:17:46 ET
Carvana (NYSE: CVNA) and CarMax (NYSE: KMX) are both used car retailers that set firm prices and simplify the buying process. Carvana sells all of its cars online, and customers can either have their vehicles delivered or pick them up at one of its 33 "vending machine" towers across America. Carmax has a much larger brick-and-mortar footprint, with 240 used car stores across the U.S. It also operates an online marketplace, which streamlines the process with deliveries and in-store pick-ups.
Carvana and CarMax both benefited from the post-pandemic surge in used car sales in 2021, but they struggled in 2022 as inflation and rising interest rates drove away potential buyers. As a result, the vehicle shortage turned into a surplus, used car prices plunged, and share prices of Carvana and Carmax plummeted 97% and 53% from their all-time highs, respectively.
But could either of these out-of-favor used-car retailers be worth buying as a turnaround play before a new bull market starts?
For further details see:
Better Stock Buy: Carvana vs. CarMax