Carvana (NYSE:CVNA) Rating Lowered to "Hold" at Wall Street Zen

Key Points

• Carvana's rating has been downgraded from "buy" to "hold" by Wall Street Zen, reflecting concerns regarding the company's stock performance.
• Despite the downgrade, twelve analysts rate Carvana as a "buy", indicating some confidence in the company's growth potential, with an average price target of $383.47.
• Major shareholder Ernest C. Garcia II has sold a significant number of shares recently, totaling over $35 million in transactions, which raises questions about insider sentiment toward the company's future prospects.

Carvana (NYSE:CVNA - Get Free Report) was downgraded by research analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a report issued on Sunday.

Several other equities analysts also recently issued reports on the stock. Citigroup reissued an "outperform" rating on shares of Carvana in a research note on Thursday, July 31st. Evercore ISI upped their price objective on shares of Carvana from $365.00 to $370.00 and gave the company an "in-line" rating in a research note on Tuesday, August 12th. Bank of America upped their price objective on shares of Carvana from $375.00 to $425.00 and gave the company a "buy" rating in a research note on Thursday, July 31st. Needham & Company LLC upped their price objective on shares of Carvana from $340.00 to $500.00 and gave the company a "buy" rating in a research note on Thursday, July 31st. Finally, Stephens upped their price objective on shares of Carvana from $300.00 to $375.00 and gave the company an "overweight" rating in a research note on Monday, July 7th. Twelve research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $383.47.

Carvana Stock Down 0.3%

Shares of NYSE CVNA opened at $369.23 on Friday. Carvana has a 12-month low of $124.39 and a 12-month high of $413.33. The company has a market capitalization of $79.46 billion, a PE ratio of 92.54, a price-to-earnings-growth ratio of 1.22 and a beta of 3.51. The company has a debt-to-equity ratio of 2.51, a current ratio of 4.00 and a quick ratio of 2.58. The firm's 50-day moving average is $351.83 and its two-hundred day moving average is $285.61.

Carvana (NYSE:CVNA - Get Free Report) last announced its quarterly earnings data on Wednesday, July 30th. The company reported $1.28 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.09 by $0.19. The business had revenue of $4.84 billion for the quarter, compared to the consensus estimate of $4.54 billion. Carvana had a net margin of 3.46% and a return on equity of 40.57%. The company's quarterly revenue was up 41.9% compared to the same quarter last year. During the same quarter in the prior year, the firm posted ($0.05) earnings per share. Equities analysts anticipate that Carvana will post 2.85 EPS for the current fiscal year.

Insider Buying and Selling

In other news, major shareholder Ernest C. Garcia II sold 100,000 shares of the firm's stock in a transaction on Tuesday, July 8th. The shares were sold at an average price of $353.76, for a total value of $35,376,000.00. Following the transaction, the insider owned 36,437,346 shares of the company's stock, valued at approximately $12,890,075,520.96. This trade represents a 0.27% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, major shareholder Ernest C. Garcia II sold 93,376 shares of the firm's stock in a transaction on Thursday, July 31st. The shares were sold at an average price of $394.16, for a total transaction of $36,805,084.16. Following the completion of the transaction, the insider directly owned 6,624 shares in the company, valued at approximately $2,610,915.84. This represents a 93.38% decrease in their position. The disclosure for this sale can be found here. In the last ninety days, insiders have sold 2,522,933 shares of company stock worth $888,062,136. 17.12% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Carvana

A number of hedge funds have recently made changes to their positions in the business. American Trust purchased a new position in shares of Carvana in the 2nd quarter valued at $394,000. Orion Porfolio Solutions LLC raised its stake in shares of Carvana by 27.3% in the 2nd quarter. Orion Porfolio Solutions LLC now owns 4,380 shares of the company's stock valued at $1,476,000 after acquiring an additional 940 shares during the period. B. Riley Wealth Advisors Inc. purchased a new position in shares of Carvana in the 2nd quarter valued at $228,000. Marex Group plc purchased a new position in shares of Carvana in the 2nd quarter valued at $4,824,000. Finally, State of Wyoming raised its stake in shares of Carvana by 27.0% in the 2nd quarter. State of Wyoming now owns 1,149 shares of the company's stock valued at $387,000 after acquiring an additional 244 shares during the period. Hedge funds and other institutional investors own 56.71% of the company's stock.

Carvana Company Profile

Carvana Co, together with its subsidiaries, operates an e-commerce platform for buying and selling used cars in the United States. Its platform allows customers to research and identify a vehicle; inspect it using company's 360-degree vehicle imaging technology; obtain financing and warranty coverage; purchase the vehicle; and schedule delivery or pick-up from their desktop or mobile devices.

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