CARS - Carvana jumps as short-sellers feel the pressure
2023-07-07 14:14:26 ET
Carvana Co. ( NYSE: CVNA ) jumped more than 16% on Friday afternoon, with year-to-date gains surpassing 500% .
The online used car retailer is one of the most shorted stocks on Wall Street with 63% of shares shorted. That compares to about 13% each for rivals Carmax, Inc. ( KMX ) and Asbury Automotive Group, Inc. ( ABG ), and 3.1% for Cars.com ( CARS ).
Most analysts are similarly lukewarm on CVNA, with 21 of 24 Wall Street analysts saying Hold or Sell and 12 of 16 Seeking Alpha analysts agreeing.
Last month, the company said it expects adjusted EBITDA for the second quarter above $50M, after previously just saying it would be positive. Shares are up more than 75% since that announcement.
Seeking Alpha Anna Sokolidou noted, however, the company is not profitable and is heavily indebted. The used car market is also not in great shape with higher interest rates. That said, the analyst urged not to short-sell the stock, noting that, "Any good piece of news can potentially make Carvana's stock soar."
More on Carvana:
- Carvana: Shorts Might Get Burned
- Top 10 most shorted stocks on Wall Street include Carvana, Beyond Meat, and more
- Bank of America pulls rating on Carvana amid elevated uncertainty
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Carvana jumps as short-sellers feel the pressure