CVNA - Why Carvana Stock Got Crushed Today
2023-07-20 15:48:35 ET
Shares of used car company Carvana (NYSE: CVNA) fell as much as 17.5% in trading on Thursday as analysts downgraded the stock and investors wondered if shares rose too high too fast. At 3 p.m. ET, shares were down 14.8% on the day.
Shares of Carvana jumped yesterday on better-than-expected second-quarter financial results. The most impressive number was $6,520 in gross profit per vehicle, which drove positive adjusted earnings before interest, taxes, depreciation, and amortization ( EBITDA ) during the quarter. But Carvana did report a net loss of $105 million for the quarter.
A complex debt restructuring deal that reduces cash interest payment in the next two years in turn for more debt and issued equity will alleviate some pain but doesn't solve the company's long-term problems. That's one reason RBC downgraded the stock today, which is putting downward pressure on shares.
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Why Carvana Stock Got Crushed Today