Shares of online car retailer Carvana (NYSE: CVNA) fell roughly 6% today after it announced plans to cut 1,500 employees. This equates to approximately 8% of the workforce.
The company is currently losing money and isn’t expected to become profitable anytime soon. As a result, these cost-cutting measures are very much needed for Carvana, as it generates a lot of revenue from loans.
As interest rates rise, it’ll be difficult for the company to offer competitive loans relative to the banks. Thus, its revenues will definitely be impacted going forward.
Is CVNA Stock a Buy?
CVNA stock has a Moderate Buy consensus rating based on seven Buys, nine Holds, and zero Sells assigned in the past three months. The average CVNA stock price target of $33.27 implies almost 325% upside potential.
