Evercore ISI Negative on Carvana (CVNA): 'Our latest web traffic … – StreetInsider.com

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StreetInsider.com Top Tickers, 7/6/2023
Evercore ISI analyst Michael Montani reiterated an In Line rating and $12.00 price target on Carvana (NYSE: CVNA).
The analyst comments “Carvana’s 2Q outlook for positive adjusted EBITDA shows that it is taking difficult but necessary actions to sustain the brand. The company’s updated outlook for above $50mn of positive 2Q adj. EBITDA compares to the prior street estimate of $9mn and our estimate of $27mn. Improving securitization results is a key driver, but so is a more rational approach to vehicle gross profit and overall profitability: 2Q total GPU of over $6k exceeds the company’s long-term goal. CVNA has been among the more heavily shorted names in our coverage with a 57% short interest, and the 26% pre-market move reflects that fact. We don’t like to be party poopers, but there are a few risks still to navigate including: 1) our outlook for 35mn used vehicle SAAR this year (-3% YoY), 2) the company’s material market share loss related to a de-emphasis of less profitable markets and a material reduction in advertising spend per vehicle sold, and 3) rising consumer credit delinquency trends/ tighter credit as a potential recession risk remains. Also, while positive EBITDA trend is encouraging there is still much work to do in order to reach a sustainable, acceptable rate of return. Our latest web traffic tracker shows a trend of ~40% declines in web traffic to Carvana’s site. More after management’s 9AM webcast. “
For an analyst ratings summary and ratings history on Carvana click here. For more ratings news on Carvana click here.
Shares of Carvana closed at $15.53 yesterday.
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