Stock Traders Buy High Volume of Put Options on Carvana (NYSE:CVNA)

Key Points

• Unusual options activity: traders bought 155,794 put options on Carvana on Thursday — about a 92% increase versus typical daily put volume, signaling heavy bearish positioning in the options market.
• Notable insider selling: the COO sold 10,000 shares (~$4.02M) and the CFO sold 12,750 shares (~$5.14M), and insiders have sold 53,574 shares worth $21.46M over the past 90 days, leaving insiders with 17.12% ownership.
• Mixed fundamentals and corporate actions: Carvana reported a large earnings beat (EPS $4.22 vs. $1.10 expected) and strong revenue growth, yet the stock trades around $295 versus a consensus analyst target of $440.59, and a 5-for-1 stock split is scheduled for May 7.

Carvana Co. (NYSE:CVNA - Get Free Report) saw some unusual options trading activity on Thursday. Stock traders purchased 155,794 put options on the company. This represents an increase of approximately 92% compared to the typical daily volume of 81,195 put options.

Insider Activity at Carvana

In other Carvana news, COO Benjamin E. Huston sold 10,000 shares of Carvana stock in a transaction on Friday, January 2nd. The shares were sold at an average price of $401.94, for a total value of $4,019,400.00. Following the completion of the sale, the chief operating officer directly owned 99,871 shares of the company's stock, valued at approximately $40,142,149.74. The trade was a 9.10% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CFO Mark W. Jenkins sold 12,750 shares of the company's stock in a transaction dated Friday, January 2nd. The shares were sold at an average price of $403.02, for a total transaction of $5,138,505.00. Following the transaction, the chief financial officer owned 204,036 shares in the company, valued at $82,230,588.72. This represents a 5.88% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 53,574 shares of company stock worth $21,463,735 over the last ninety days. 17.12% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Carvana

A number of institutional investors and hedge funds have recently modified their holdings of CVNA. Thurston Springer Miller Herd & Titak Inc. purchased a new stake in Carvana in the 4th quarter worth approximately $29,000. Farmers & Merchants Investments Inc. purchased a new position in shares of Carvana during the 4th quarter valued at $29,000. Motiv8 Investments LLC bought a new position in shares of Carvana in the fourth quarter worth $33,000. Salomon & Ludwin LLC raised its position in shares of Carvana by 112.5% in the fourth quarter. Salomon & Ludwin LLC now owns 85 shares of the company's stock worth $37,000 after buying an additional 45 shares in the last quarter. Finally, ORG Partners LLC raised its position in shares of Carvana by 8,700.0% in the third quarter. ORG Partners LLC now owns 88 shares of the company's stock worth $33,000 after buying an additional 87 shares in the last quarter. 56.71% of the stock is owned by hedge funds and other institutional investors.

Analyst Ratings Changes

CVNA has been the subject of a number of research reports. Jefferies Financial Group lowered their price objective on shares of Carvana from $550.00 to $485.00 and set a "buy" rating on the stock in a report on Monday, February 23rd. Wells Fargo & Company lowered their target price on shares of Carvana from $525.00 to $425.00 and set an "overweight" rating on the stock in a report on Thursday, February 19th. Stephens reaffirmed an "overweight" rating and issued a $519.00 price target on shares of Carvana in a research report on Thursday, February 19th. William Blair reiterated an "outperform" rating on shares of Carvana in a research note on Friday, March 13th. Finally, BTIG Research decreased their price objective on Carvana from $535.00 to $455.00 and set a "buy" rating for the company in a report on Thursday, February 19th. One research analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating and five have assigned a Hold rating to the company's stock. According to MarketBeat.com, the company currently has an average rating of "Moderate Buy" and a consensus target price of $440.59.

Carvana Stock Performance

NYSE:CVNA traded up $3.93 during trading hours on Thursday, reaching $295.10. The stock had a trading volume of 4,370,447 shares, compared to its average volume of 4,018,573. The stock has a market cap of $64.58 billion, a P/E ratio of 36.70 and a beta of 3.60. The stock has a 50 day simple moving average of $380.08 and a 200 day simple moving average of $377.30. The company has a debt-to-equity ratio of 1.15, a quick ratio of 2.73 and a current ratio of 4.31. Carvana has a 12-month low of $148.25 and a 12-month high of $486.89.

Carvana's stock is scheduled to split on the morning of Thursday, May 7th. The 5-1 split was announced on Friday, March 13th. The newly minted shares will be issued to shareholders after the market closes on Wednesday, May 6th.

Carvana (NYSE:CVNA - Get Free Report) last issued its earnings results on Wednesday, February 18th. The company reported $4.22 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.10 by $3.12. Carvana had a net margin of 6.92% and a return on equity of 50.96%. The business had revenue of $5.60 billion for the quarter, compared to analysts' expectations of $5.24 billion. During the same quarter in the previous year, the firm posted $0.56 EPS. The business's revenue for the quarter was up 58.0% compared to the same quarter last year. On average, research analysts forecast that Carvana will post 2.85 EPS for the current fiscal year.

About Carvana

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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