- Carvana is a disruptive e-commerce company that is leading the modernization of the highly fragmented used-car market ($840 billion).
- Carvana's focus on enriching the customer experience in the used-car buying and selling process has received tremendous praise from consumers, which is evidenced by the company's explosive growth.
- In 2019, Carvana sold ~177K vehicles. This figure is merely a fraction of the 40 million used-cars sold in the United States. Hence, Carvana has a long growth runway.
- According to my estimates, Carvana has an intrinsic value of ~$92, i.e., it is currently overvalued. Moreover, the total expected returns of ~9% are below my investment hurdle rate.
- I rate Carvana neutral at $165.
For further details see:
Carvana: A Compelling Narrative With One Major Issue