Carvana: More Trouble Ahead

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About: Carvana Co. (CVNA)
by: WY Capital
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WY Capital
Long/short equity, special situations, contrarian, Growth
Summary

Carvana reported unimpressive Q3 results with widening losses yet the stock price increases over 20%.

Growth is slowing down substantially, which is quite concerning for a money losing company like CVNA.

The strategy of increasing profits through buying cars from customers is quite limited.

Valuation is high for a company that has generated widening losses in a risky industry.

Despite reporting an unimpressive Q3 with widening losses and slowing growth, Carvana(CVNA) has risen substantially by over 20% in less than a month. We believe that the current price increase has little to