If you had invested $1,000 in Carvana Co. (NASDAQ: CVNA) as of the beginning 2023, it would be worth a staggering $35,000.
This incredible rise in value has propelled Carvana an online used-car retailer, ahead AI giant Nvidia Corp., which has only seen a gain by 750% during the same period.
Carvana stock has soared more than 3,000% in the last year. This is impressive, considering that the company was close to bankruptcy at the end of 2022.
The turnaround began with strategic measures to cut costs and a comprehensive plan for debt restructuring that has made shareholders happier than ever.
Many investors wonder if they missed the chance to profit from this growth.
Why has Carvana stock performed so well?
Carvana’s success is largely due to its innovative approach in buying used cars. It offers a more user friendly alternative to traditional dealerships.
Buying a used car usually involves extensive paperwork, negotiations and limited inventory options.
Carvana, on the other hand, streamlines the process by allowing buyers to select from a wide selection of vehicles, and secure financing in just minutes.
Carvana also offers a variety of delivery options at no additional cost, including a trial period of up to seven days. This makes it a popular choice for car buyers.
Carvana’s customer-centric approach may help it continue to perform well, as it simplifies car buying.
Carvana shares still have upside potential?
Carvana’s continued success in attracting new customers is also a factor in the stock’s impressive performance.
CVNA sold 2,31 times more units in the latest reported quarter compared to the second half of 2019.
Despite its growth, the company holds less than 1% market share in the U.S. for used cars, which indicates significant potential for expansion.
Carvana recently reported positive earnings for the last two quarters. The company has moved out of the red into profitability.
Wall Street has maintained an “overweight rating” on Carvana’s stock due to this positive trend.
Carvana is not without its challenges.
The company has approximately $5.6 billion of long-term debt. This could be a risk.
The competition is also increasing, not only with established players such as CarMax and AutoNation, but also with traditional dealerships who are rapidly improving their digital offerings.
Carvana’s extraordinary success in the past two year may be difficult to replicate, but investors can still expect healthy returns over the long term.
The company’s ability to innovate and capture the market share makes it an attractive option for investors looking to invest in a rapidly evolving used car market.
This post Carvana Stock Soars: $1,000 Investment in Early 2023 Now Worth $35,000 may be updated as new developments unfold
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