It wasn’t that long ago—about a year, really—when a lot of places were wondering if car dealer Carvana (NASDAQ:CVNA) had a hope of emerging from disaster and potential bankruptcy. But it’s been quite a year for Carvana, and it’s looking a lot better. In fact, investors pushed it up nearly 3% in Friday afternoon’s trading mostly on the successes seen so far.
Carvana has been on a serious upward run through much of 2023. It kicked off the year with shares down around $5. However, those who bought in and held on until the start of 2024 were rewarded with an 11-fold rise to over $55 per share. It’s retraced somewhat since then, but even those who held past the top are still looking at nearly nine-fold improvement. Granted, it’s still not a patch on the all-time high of $370 back in 2021, but Carvana’s management looks for good times ahead.
Reasons Behind the Gains
Reports suggest there were plenty of drivers for Carvana’s recent gains. It started with a hefty round of cost-cutting, including 4,000 lost jobs. It was then followed up with a new software platform, a refinement in reconditioning processes, and increased adoption of artificial intelligence in key processes. These steps led to an end result that was a net positive.
However, It hasn’t been all positive. Carvana management is facing several lawsuits alleging their involvement in a pump-and-dump scheme around Carvana stock, and some analysts are noting that other firms are offering Carvana-style opportunities without the potential issues. But still, things are certainly looking up.
Is Carvana Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on CVNA stock based on one Buy, 11 Holds, and three Sells assigned in the past three months, as indicated by the graphic below. After a 201.35% rally in its share price over the past year, the average CVNA price target of $39.85 per share implies 9.02% downside risk.
