Not so long ago, Carvana (NYSE:CVNA) looked like it was on its last legs, and for good reasons. But it’s turned things around substantially since then and brought out some exciting new prospects. It was enough for BTIG to weigh in very positively, which sent Carvana shares up over 5% in the closing minutes of Friday’s trading session.
The word from BTIG basically spelled out everything that Carvana has been doing right lately, and there were plenty of things on that list. A sufficient number of things, in fact, to give Carvana not only BTIG’s Buy rating but also a target price of $155 per share, up 20% against where it closed on Thursday.
As for what it was Carvana was getting right, start with “…superior unit economics…,” and from there, proceed to “…a better user experience, and stronger managerial execution.” All of this combined makes a company that was once on the brink of disaster a “…better mousetrap in an enormous total addressable market that investors shouldn’t overlook.”
Picking Up EVs
While many manufacturers are finding making electric vehicles (EVs) a little tougher than expected, Carvana is working to get its hands on used ones for resale. And it’s reportedly pulling from a federal tax credit to make it happen. With Carvana’s newest upgrades, the system can automatically apply a tax credit to your used EV purchase and make it that much more accessible.
That was just the start of some recently-added new features that should go a long way toward improving the customer experience, as BTIG noted. However, it’s worth noting that this may only go so far, as consumers are concerned about the availability of charging stations and other support infrastructure. Winter performance may also be weighing on consumers in some areas.
Is Carvana Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on CVNA stock based on four Buys, 12 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 263.85% rally in its share price over the past year, the average CVNA price target of $114.14 per share implies 16.18% downside risk.
