Carvana (NYSE:CVNA) Trading Down 8% – Time to Sell?

Carvana Co. (NYSE:CVNA) was down 8% during mid-day trading on Wednesday . The company traded as low as $434.50 and last traded at $439.6920. Approximately 1,666,492 shares traded hands during trading, a decline of 41% from the average daily volume of 2,816,263 shares. The stock had previously closed at $477.72.

Key Stories Impacting Carvana

Here are the key news stories impacting Carvana this week:

• Positive Sentiment: Analysts and brokers publicly defended Carvana and some raised price targets, which has supported intraday rebounds and suggests parts of Wall Street view the short report as overstated. Carvana stock rises as analysts defend company following short report
• Positive Sentiment: Underlying fundamentals cited by defenders: recent quarter showed record revenue, positive GAAP operating income and improved liquidity / debt reduction — arguments that the business is cash‑generating and operationally stronger than critics claim. Carvana Drops 14% After $1B Accounting Allegations
• Neutral Sentiment: Positive style‑score and momentum writeups (Zacks) highlight growth and momentum characteristics that appeal to risk‑tolerant investors, but these are stylistic views not rebuttals of the short‑seller’s claims. Why Carvana (CVNA) is a Top Momentum Stock for the Long-Term
• Neutral Sentiment: Short‑term technical/flow traders are active: the stock swung sharply lower on the report then showed rebounds, indicating high intraday volatility that can create trading opportunities but also sharp losses. Stock Of The Day: Is This The Bottom For Carvana?
• Negative Sentiment: Gotham City Research released a detailed short report alleging >$1B of overstated earnings via undisclosed related‑party transactions (DriveTime/Bridgecrest/GoFi). Those claims are the immediate catalyst for the sell‑off and could materially change reported results if proven. Gotham City Research short report on Carvana
• Negative Sentiment: Multiple securities law firms have opened investigations and are soliciting plaintiffs (BFA, Rosen, Pomerantz, Kirby McInerney, Bragar, Moore Law), increasing the chance of class actions and litigation costs. Legal risk is now a major short‑to‑medium‑term headwind. Bragar Eagel & Squire investigation notice
• Negative Sentiment: Regulatory and audit risks cited in the short report (an SEC subpoena referenced; same auditor across related entities) could lead to investigations, restatements or enforcement — outcomes that would likely pressure the stock well beyond current volatility. MarketBeat analysis of accounting allegations and regulatory risk

Wall Street Analysts Forecast Growth

Several equities analysts have recently issued reports on CVNA shares. Jefferies Financial Group boosted their target price on Carvana from $475.00 to $550.00 and gave the company a “buy” rating in a research note on Thursday, December 11th. Stephens boosted their price objective on shares of Carvana from $454.00 to $519.00 and gave the company an “overweight” rating in a research report on Friday, January 9th. UBS Group raised their price target on Carvana from $450.00 to $545.00 and gave the company a “buy” rating in a report on Wednesday, January 14th. DA Davidson set a $360.00 price target on shares of Carvana in a research note on Thursday, October 30th. Finally, Wall Street Zen lowered shares of Carvana from a “buy” rating to a “hold” rating in a research note on Sunday, October 19th. Nineteen research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. According to MarketBeat.com, Carvana presently has a consensus rating of “Moderate Buy” and an average target price of $474.27.

Carvana Trading Down 6.3%

The company has a current ratio of 4.05, a quick ratio of 2.55 and a debt-to-equity ratio of 1.63. The stock has a market capitalization of $87.09 billion, a PE ratio of 91.41, a P/E/G ratio of 1.03 and a beta of 3.54. The stock has a 50 day moving average price of $431.93 and a 200-day moving average price of $378.97.

Carvana (NYSE:CVNA) last posted its earnings results on Wednesday, October 29th. The company reported $1.03 earnings per share for the quarter, missing analysts’ consensus estimates of $1.29 by ($0.26). Carvana had a net margin of 3.44% and a return on equity of 30.62%. The firm had revenue of $5.65 billion during the quarter, compared to the consensus estimate of $5.04 billion. During the same period in the prior year, the company posted $0.64 EPS. The firm’s revenue was up 54.5% compared to the same quarter last year. Sell-side analysts expect that Carvana Co. will post 2.85 earnings per share for the current year.

Insiders Place Their Bets

In other news, VP Stephen R. Palmer sold 1,000 shares of the business’s stock in a transaction dated Friday, January 2nd. The stock was sold at an average price of $419.48, for a total value of $419,480.00. Following the transaction, the vice president directly owned 38,744 shares in the company, valued at $16,252,333.12. The trade was a 2.52% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CFO Mark W. Jenkins sold 12,750 shares of Carvana stock in a transaction that occurred on Friday, January 2nd. The shares were sold at an average price of $403.02, for a total transaction of $5,138,505.00. Following the sale, the chief financial officer owned 204,036 shares in the company, valued at approximately $82,230,588.72. The trade was a 5.88% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders have sold 435,256 shares of company stock valued at $182,324,727. 17.12% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently bought and sold shares of CVNA. Thurston Springer Miller Herd & Titak Inc. bought a new stake in Carvana in the fourth quarter worth about $29,000. Hilltop National Bank bought a new stake in shares of Carvana in the 2nd quarter valued at about $25,000. Salomon & Ludwin LLC increased its holdings in shares of Carvana by 112.5% in the 4th quarter. Salomon & Ludwin LLC now owns 85 shares of the company’s stock valued at $37,000 after acquiring an additional 45 shares during the period. ORG Partners LLC boosted its position in Carvana by 8,700.0% during the third quarter. ORG Partners LLC now owns 88 shares of the company’s stock valued at $33,000 after purchasing an additional 87 shares in the last quarter. Finally, Washington Trust Advisors Inc. bought a new stake in shares of Carvana in the 3rd quarter valued at about $38,000. 56.71% of the stock is owned by hedge funds and other institutional investors.

About Carvana

Carvana Co is an online-only retailer of used vehicles that operates a consumer-facing e-commerce platform for buying and selling cars. The company markets and sells inspected, reconditioned pre-owned vehicles through its website, where shoppers can browse inventory, view detailed 360-degree photos and vehicle history reports, finance purchases, and arrange delivery or pickup. Carvana’s model is built around a digital end-to-end car buying experience that aims to simplify vehicle transactions compared with traditional dealerships.

Its products and services include direct retail sales of used cars, trade-in and purchase offers for consumer vehicles, vehicle financing and related protection products, and a seven-day return policy that allows customers to test a vehicle in everyday use.