Joe Raedle
Shares of Carvana Co. (NYSE:CVNA) fall 14.50% on Monday morning and fell as much as 24% earlier in the session.
Volume on highly shorted auto retail stock is over 31 million shares in just two hours act in spite of a trading stoppage because of volatility.
Monday’s drop followed the stock’s worst day ever on Friday that came after weak earnings reports confused investors. The Arizona-based used-car seller posted a loss of $2.67 per share along with a 2.6% year-over-year drop in revenue to $3.39 billion. The loss per share was $0.50 larger than anticipated while the sales figure was $300 million below analyst consensus. Total retail sales in the quarter fell to 102,570 units, down 8% year-on-year.
On Wall Street, Deutsche Bank analyst Emmanuel Rosner noted that CVNA’s weak third-quarter results largely reflected short-term challenges related to a weakening macro backdrop and weaker consumer demand. feebleness. He noted that rising interest rates and still-rising prices limit affordability for potential car buyers.
Baird cuts his price target on Carvana (CVNA) on Monday to $30 from $65, but kept the Better rating in place. Analyst Colin Sebastian said Carvana’s (CVNA) light unit sales reflect both external forces and management’s priority in controlling costs. Looking further ahead, Baird still sees meaningful long-term upside potential with a very large total market addressable if management can successfully execute operations at scale.
Carvana (CVNA) made a new all-time low of $6.68 earlier on Monday, which is around 98% below a 52-week high.
