Despite a promising Q2 performance and a debt restructuring that boosted liquidity, Carvana (NYSE:CVNA) shares tanked as RBC Capital Markets shifted its stance to “Underperform.” Analysts Brad Erickson and Logan Reich reasoned that while long-term margin improvements are a given, a quicker return to growth might be necessary to offset debt costs.
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They also pointed to potential dilution and an increased debt load following the restructuring. Despite these concerns, RBC upped its price target to $30 from $9, attributing it to improved near-term performance and reduced liquidity risks. The firm, however, anticipates that the stock will level off over time as market volatility decreases.
Is Carvana Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on CVNA stock based on two Buys, 12 Holds, and three Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average price target of $28.08 per share implies 43.26% downside potential.
