Investors Purchase High Volume of Carvana Put Options (NYSE:CVNA)

Key Points

• Carvana saw unusually heavy bearish options activity: Investors purchased 89,113 put options, about 48% above the average volume. The stock fell 7.5% to $64.85 during Tuesday trading.
• Insider activity was mixed, with one director selling shares worth $1.02 million and another buying $1.55 million. Insiders have collectively sold $28.8 million worth of stock over the past 90 days, while institutional investors own 56.71% of the company.
• Despite the recent decline and lower analyst price targets, Wall Street maintains a “Moderate Buy” consensus with an average target of $84.14. Carvana recently exceeded quarterly EPS and revenue estimates, with revenue rising 52.4% year over year.

Carvana Co. (NYSE:CVNA - Get Free Report) saw some unusual options trading activity on Tuesday. Investors acquired 89,113 put options on the company. This represents an increase of approximately 48% compared to the average volume of 60,304 put options.

Insider Buying and Selling

In related news, Director J Danforth Quayle sold 14,525 shares of the stock in a transaction on Wednesday, June 10th. The stock was sold at an average price of $70.00, for a total value of $1,016,750.00. Following the transaction, the director directly owned 214,960 shares of the company's stock, valued at approximately $15,047,200. This trade represents a 6.33% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Michael E. Maroone bought 25,000 shares of Carvana stock in a transaction that occurred on Friday, July 31st. The stock was purchased at an average price of $61.80 per share, for a total transaction of $1,545,000.00. Following the acquisition, the director directly owned 168,573 shares of the company's stock, valued at $10,417,811.40. The trade was a 17.41% increase in their position. The SEC filing for this purchase provides additional information. Insiders have sold 420,897 shares of company stock worth $28,777,664 over the last 90 days. Company insiders own 15.19% of the company's stock.

Institutional Trading of Carvana

Several large investors have recently bought and sold shares of CVNA. Sands Capital Management LLC grew its stake in shares of Carvana by 44.4% during the fourth quarter. Sands Capital Management LLC now owns 2,442,534 shares of the company's stock valued at $1,030,798,000 after acquiring an additional 751,019 shares in the last quarter. Capricorn Fund Managers Ltd acquired a new position in shares of Carvana in the first quarter worth about $29,866,000. Gavilan Investment Partners LLC lifted its stake in shares of Carvana by 24.6% in the fourth quarter. Gavilan Investment Partners LLC now owns 86,000 shares of the company's stock worth $36,294,000 after acquiring an additional 17,000 shares in the last quarter. Swiss National Bank lifted its stake in shares of Carvana by 9.9% in the first quarter. Swiss National Bank now owns 395,180 shares of the company's stock worth $124,237,000 after acquiring an additional 35,720 shares in the last quarter. Finally, Hsbc Holdings PLC boosted its holdings in Carvana by 239.6% in the fourth quarter. Hsbc Holdings PLC now owns 221,727 shares of the company's stock valued at $93,748,000 after purchasing an additional 156,430 shares during the last quarter. Institutional investors and hedge funds own 56.71% of the company's stock.

Wall Street Analysts Forecast Growth

A number of equities analysts have recently commented on CVNA shares. Argus cut their price objective on Carvana from $500.00 to $100.00 in a report on Monday, May 11th. BTIG Research reiterated a "buy" rating and set a $87.00 target price on shares of Carvana in a report on Tuesday. Gordon Haskett increased their target price on shares of Carvana from $67.00 to $85.00 and gave the stock a "hold" rating in a research report on Thursday, April 30th. Needham & Company LLC restated a "buy" rating and issued a $120.00 price target on shares of Carvana in a report on Thursday, July 30th. Finally, Citizens Jmp reduced their price target on shares of Carvana from $103.00 to $83.00 and set a "market outperform" rating on the stock in a research report on Thursday, July 30th. One analyst has rated the stock with a Strong Buy rating, sixteen have given a Buy rating and seven have issued a Hold rating to the stock. Based on data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average price target of $84.14.

Carvana Stock Down 7.5%

Shares of CVNA traded down $5.24 during midday trading on Tuesday, reaching $64.85. 16,860,675 shares of the company were exchanged, compared to its average volume of 14,572,993. The stock has a 50-day moving average price of $67.14 and a 200-day moving average price of $68.79. The company has a market cap of $71.37 billion, a price-to-earnings ratio of 35.87, a P/E/G ratio of 2.75 and a beta of 3.46. Carvana has a 1-year low of $54.46 and a 1-year high of $97.38. The company has a current ratio of 3.93, a quick ratio of 2.33 and a debt-to-equity ratio of 0.94.

Carvana (NYSE:CVNA - Get Free Report) last posted its earnings results on Wednesday, July 29th. The company reported $0.42 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.39 by $0.03. The business had revenue of $7.38 billion during the quarter, compared to analyst estimates of $6.90 billion. Carvana had a return on equity of 37.06% and a net margin of 6.26%.The company's revenue for the quarter was up 52.4% compared to the same quarter last year. During the same quarter last year, the firm earned $1.51 earnings per share. Research analysts expect that Carvana will post 1.68 earnings per share for the current year.

Carvana Company Profile

Carvana Co is an online-only retailer of used vehicles that operates a consumer-facing e-commerce platform for buying and selling cars. The company markets and sells inspected, reconditioned pre-owned vehicles through its website, where shoppers can browse inventory, view detailed 360-degree photos and vehicle history reports, finance purchases, and arrange delivery or pickup. Carvana's model is built around a digital end-to-end car buying experience that aims to simplify vehicle transactions compared with traditional dealerships.

Its products and services include direct retail sales of used cars, trade-in and purchase offers for consumer vehicles, vehicle financing and related protection products, and a seven-day return policy that allows customers to test a vehicle in everyday use.

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