Can Carvana Stock Continue To Outperform?

: CVNA | Carvana Co.  News, Ratings, and Charts

Carvana (CVNA) is well positioned to benefit from rising used-car sales because Americans are expected to remain reluctant to commute by public transport amid the still-rising spread of the coronavirus pandemic. Moreover, increasing market demand for buying and selling cars online specifically bodes well for this online used car retailer. Let’s take a closer look at some of its particulars.

The company’s ecommerce platform allows customers to research and identify a vehicle using its 360-degree vehicle imaging technology, and to schedule vehicle delivery or pick-up from their desktop or mobile devices.

The transition from traditional in-person to online car buying and selling has the potential to significantly drive demand for digital auto retailers. Furthermore, as most people are avoiding public transportation or ride-hailing services amid rising COVID-19 infections, demand for personal vehicles will likely be bolstered, thereby providing CVNA with a strong growth opportunity.

CVNA’s diverse retail offering and continued investments have helped it gain 183.5% over the past year. This impressive performance combined with several other factors has helped CVNA earn a “Buy” rating in our proprietary rating system.

Here is how our proprietary POWR Ratings system evaluates CVNA:

Trade Grade: A

CVNA is currently trading above its 50-day and 200-day moving averages of $226.74 and $155.12, respectively. This indicates that the stock is in an uptrend. Also, the stock has gained 23.5% over the past three months, reflecting solid short-term bullishness.

CVNA’s revenue has increased by 41% year-over-year to $1.54 billion in the third quarter ended September 30, 2020. Its gross profit increased 90% from the year-ago value to $261 million over this period. This increase is primarily due to its increase in wholesale and retail vehicle sales. The company recently introduced “as-soon-as next-day” vehicle delivery in Pine Bluff, which allows customers to shop more than 20,000 vehicles on or trade their current vehicle to CVNA using this new delivery schedule. This launch should help the company to expand throughout the state by offering ease, convenience, and transparency in delivery to its customers.

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