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I was wrong about Carvana Co. (NYSE:CVNA). Big time. Back in 2022, I thought Carvana was a business about to go bust, and in June 2023, I thought the positive adjusted EBITDA reported by the company was
Carvana: I Was Wrong In 2022, But My Buyside Analyst Friend Got It Right (Rating Upgrade)
Summary
- I was wrong about Carvana, but my analyst friend Charaka Mahage's bullish stance in December 2022 proved correct, with Carvana stock surging over 3,600% since then.
- Over the last weekend, I sat down with my friend to discuss why he believed in Carvana back then and why he continues to be bullish on Carvana's long-term prospects.
- The recovery of Carvana was fueled by effective cost-cutting measures, better unit economics, and the integration of Adesa assets, as highlighted by the analyst.
- Despite his optimism, the analyst warns of potential risks, including a slowdown in used car demand, market shifts, and the impact of Carvana’s high debt burden.
Dilantha De Silva is an experienced equity analyst and investment researcher with over 10 years in the investment industry. He writes insightful articles for Seeking Alpha, GuruFocus, TipRanks, and ValueWalk, with a significant following on Seeking Alpha. Dilantha’s expertise spans across various sectors, with a particular focus on small-cap stocks that are overlooked by Wall Street analysts. He is a CFA Level III candidate and an Associate Member of the Chartered Institute for Securities and Investment (CISI). Dilantha has been featured on CNBC and Bloomberg, and his work has been prominently showcased on Nasdaq, Yahoo Finance, and other leading investment platforms. When not analyzing stocks and writing, Dilantha is involved in private equity transactions, including acquiring and managing businesses.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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