The return of “left for dead” stocks continues as investors look for opportunities in the market beyond the “magnificent seven.” 🔍
Carvana is an excellent example of this turnaround story in action, with the stock posting its first-ever annual profit and catching several analyst upgrades. 💪
The online car retailer’s $450 million in net income during 2023 compared to a $1.59 billion loss in 2022. Management’s focus on cost-cutting is paying dividends, and it is currently working on step two of a three-step restructuring plan.
While management admitted the macroeconomic car-selling environment remains uncertain, it now expects to grow retail units sold in 2024. And with its total gross profit per unit more than doubling to $5,283 last quarter, improved unit economics should help it approach breakeven on an adjusted EBITDA basis. 🔺
Long story long, the stock was priced for bankruptcy, but the company actually turned things around. It’s still got a long road ahead of it, but “not dead” is a big improvement from imminent bankruptcy… And that is certainly reflected in $CVNA shares, which made a new cycle high and are now up 2,100% from their lows. 📈
We’ll see if it can continue, but the wild ride for Carvana bears certainly continued this week. 🤪
