Why Carvana’s Business is Not Working

Carvana, an online used car retailer, has seen its stock price drop over 90% from highs seen during the pandemic. I think this is a classic example of how investors react when a linear tech company’s growth slows but the company is still nowhere near profitability. Is a 90% decline in company valuation warranted for Carvana? It’s hard to say but I do feel that tech valuations coming back down to earth is overall a long run positive.

I go on to compare Carvana to its platform counterpart, CarGurus. While this admittedly isn’t a perfect comparison, it still does a competent job of illustrating how across all industries, asset light platform businesses are more resilient during market downturns.

#Carvana #stockmarket #businessnews

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