tumbled 11% in afternoon trading on Friday, as analysts suspect that the debt-laden company's upbeat second-quarter profit forecast is a 'one-time' upside.
While analysts have been encouraged by the outlook, they do not expect more gains as the company has been struggling to sell cars acquired at elevated prices, with buyers restricting their spend due to concerns of an impending recession."We believe the sale of receivables is likely one time in nature as CVNA pushed off sales of receivables in 4Q22 and the banking crisis in 1Q23 was a drag on receivables sales," said Michael Baker, analyst at D A Davidson.
Analysts also echoed worries about Carvana's plans to profitably return to growth given the existing debt load. The retailer did not immediately respond to queries about its debt.