CVNA · Carvana
Carvana in 2023: bankruptcy fears, a margin turnaround, a debt deal
2023 · +1,015% in the calendar year
For scale: buying every US stock breakout from 2018 to 2026 with no selection returned a median −22.6% a year later, measured on the 14,674 with a full twelve months of data. How it was measured
On 7 December 2022, as bankruptcy concerns grew, shares of Carvana, the online used-car retailer, fell 43% to a $3.83 close: a market value of $723M, against ~$60B at the 2021 peak. The first-quarter 2023 shareholder letter, released on 4 May 2023, changed the question. Retail units fell 25% to 79,240, yet gross profit rose to $341M from $298M, adjusted EBITDA narrowed to −$24M from −$348M, and management guided to positive adjusted EBITDA for the second quarter.
The debt came next. On 19 July 2023 Carvana announced an agreement with noteholders that cut total debt by more than $1.2B and annual interest expense by more than $430M for two years, alongside preliminary second-quarter revenue of $2.97B against estimates of $2.59B. The shares rose 40% that day. The stock finished at +1,015% in calendar 2023. In February 2024 Carvana reported net income of $450M for 2023, its first year in the black, against a net loss of $1.59B in 2022.
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Sources: CNBC, 7 Dec 2022 · Carvana Q1 2023 shareholder letter, SEC Ex-99.2, 4 May 2023 · CNBC, 19 Jul 2023 · CNBC, 23 Feb 2024. Price figures are split-adjusted, not dividend-adjusted.
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