Stocks of Carvana Co. (CVNA) are poised to climb above their peers

Carvana Co. (NYSE: CVNA) stock jumped 10.63% on Monday to $7.18 against a previous-day closing price of $6.49. With 24.86 million shares changed hands, the volume of the stock remained heavier than its average volume of 24.04 million shares. During the session, the Internet Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $7.39 whereas the lowest price it dropped to was $6.49. The 52-week range on CVNA shows that it touched its highest point at $167.00 and its lowest point at $3.55 during that stretch. It currently has a 1-year price target of $11.81. Beta for the stock currently stands at 2.47.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of CVNA was up-trending over the past week, with a rise of 2.28%, but this was up by 72.60% over a month. Three-month performance dropped to -50.41% while six-month performance fell -71.71%. The stock lost -95.46% in the past year, while it has gained 51.48% so far this year. A look at the trailing 12-month EPS for CVNA yields -8.93 with Next year EPS estimates of -7.59. For the next quarter, that number is -2.21. This implies an EPS growth rate of 38.10% for this year and 27.70% for next year.

Float and Shares Shorts:

At present, 105.86 million CVNA shares are outstanding with a float of 95.72 million shares on hand for trading. On Oct 13, 2022, short shares totaled 34.57 million, which was 32.68% higher than short shares on Sep 14, 2022. In addition to Mr. Ernest C. Garcia III as the firm’s Co-Founder, Pres, CEO & Chairman, Mr. Benjamin Huston serves as its Co-Founder & COO.


Institutional Ownership:

Through their ownership of 120.68% of CVNA’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 70.91% of CVNA, in contrast to 29.27% held by mutual funds. Shares owned by individuals account for 12.87%. As the largest shareholder in CVNA with 13.37% of the stake, Baillie Gifford & Co. holds 14,168,781 shares worth 14,168,781. A second-largest stockholder of CVNA, Morgan Stanley Investment Managem, holds 12,839,080 shares, controlling over 12.12% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in CVNA, holding 8,429,089 shares or 7.96% stake. With a 2.68% stake in CVNA, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 2,843,581 shares are owned by the mutual fund manager. The Vanguard Small Cap Index Fund, which owns about 2.32% of CVNA stock, is the second-largest Mutual Fund holder. It holds 2,456,974 shares valued at 11.65 million. Morgan Stanley Instl. Fund-Growth holds 1.86% of the stake in CVNA, owning 1,970,810 shares worth 9.34 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for CVNA since 27 analysts follow the stock currently. There are 3 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 22 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With CVNA analysts setting a high price target of $45.00 and a low target of $1.00, the average target price over the next 12 months is $11.25. Based on these targets, CVNA could surge 526.74% to reach the target high and fall by -86.07% to reach the target low. Reaching the average price target will result in a growth of 56.69% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. CVNA will report FY 2022 earnings on 02/23/2024. Analysts have provided yearly estimates in a range of -$9.13 being high and -$10.32 being low. For CVNA, this leads to a yearly average estimate of -$9.87. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Carvana Co. surprised analysts by -$0.77 when it reported -$2.67 EPS against a consensus estimate of -$1.90. The surprise factor in the prior quarter was -$0.42. Based on analyst estimates, the high estimate for the next quarter is -$1.14 and the low estimate is -$2.59. The average estimate for the next quarter is thus -$2.03.

Summary of Insider Activity:

Insiders traded CVNA stock several times over the past three months with 6 Buys and 25 Sells. In these transactions, 336,000 shares were bought while 17,603 shares were sold. The number of buy transactions has increased to 38 while that of sell transactions has risen to 108 over the past year. The total number of shares bought during that period was 4,398,618 while 144,303 shares were sold.

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