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The Weekly Buzzing Stocks by Billy KawasakiCarvanaCVNATOP PICKFeb 02, 2023

Founded in 2012 and based in Phoenix, Carvana's mission is to change the way people buy cars. By removing the traditional dealership infrastructure and replacing it with technology and exceptional customer service, Carvana offers consumers an intuitive and convenient online car buying and financing platform. Carvana.com enables consumers to quickly and easily shop more than 20,000 vehicles, finance, trade-in or sell their current vehicle to Carvana, sign contracts, and schedule as-soon-as-next-day delivery or pickup at one of Carvana's patented, automated Car Vending Machines. Social media mentions are up 152% in the past 24h.

The Weekly Buzzing Stocks by Billy Kawasaki

Unknown

$17.17

Stock price when the opinion was issued

$66.77

As of Jun 18, 2026. Market Open.

Automotive

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BUY

It got its groove Back. From mid-September till last week, shares were cut in half. The used car business is not the place to be when you're worried about interest rates. But shares are popping in the past week, partially due to a benign Fed/Powell meeting, and Carvana reported a stellar quarter last week.

STRONG BUY

Is heavily shorted, but he keeps recommending it. Today, they announced earnings suddenly. Shares soared 40% today with a blowout quarter--record sales, a new deal to reduce debt by $1.2 billion, Q2 earnings beat on all lines. A great comeback story.

COMMENT

Short it?

Shares are up 670% in the last 6 months, but do not short it.

DON'T BUY

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

CVNA has recovered quite well this year, after a substantial drawdown of around 90% from its peak in 2021 and it is now trading at 0.2x times' Price/Sales (as the company has negative EBITDA, earnings and even book value). Growth was more than 100% in COVID years but went substantially to even negative growth in recent quarters. The balance sheet is highly leveraged with $8.2B of net debt while still burning cash. Overall, the company was growing really fast in the COVID years, with the promise to become the leader of used cars. However, the company is still unprofitable, burning cash quite significantly, highly leveraged, and may need to raise additional capital in tough times. We consider the share price highly volatile, and we would prefer to wait until profitability has been achieved. The company came precariously close recently to going under, and the short position remains more than 50%. Too risky for us.
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DON'T BUY

His data says that this market is overbought, and a pullback is coming (a buying oppoprtunity). he's concerned because we're seeing the return of rank speculation in weak stocks, like this one which was a meme stock before. A red flag! Avoid buying these after they spike and this has in the past week, though plunged today. Carvana is talking about restructuring its debt, which signals a possible bankruptcy. The used car market has withered a lot and Carvana is far from profitability. Avoid. You could lose your entire investment.

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TOP PICK

SELL

For year he loved their business model, but shares got too expensive and he said sell last summer. It's down 89% from its peak. They announced 2,500 layoffs today. Sadly, it's a pandemic loser.

COMMENT

It reported yesterday: used car sales were higher than expected, doubling YOY, but earnings came in at a loss. They make more money per car they sell, but they can't get enough vehicles to sell. So they didn't sell as many cars as tthey wanted. Also, their gross profit per unit could decline in Q4 while general expenses will rise. He likes it as a long-term growth story, but they can't do much about the shortages. If the supply chain mess is sorted by mid-2022, he's confident that the industry can ramp up production.

COMMENT

20% of shares are shorted. Business is good, but he needs to research this name more.

BUY

Deals used cars. Even before Covid, it had a contactless business model where you could buy a used car without talking to anybody. It has staying power.

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