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A handful of stocks benefited massively during the pandemic era of 2020 and 2021. It was an interesting time to be an investor, to say the least, and those who targeted the stay-at-home stocks were rewarded handsomely with considerable gains.

And one of those stocks, Carvana (CVNA - Free Report), recently reported results. The stock was seemingly left behind following its immense run during the period, cratering in value before returning in a massive way this year.

But is the former winner again worth investors’ attention? Let’s take a closer look.

Carvana Stages Massive Comeback

Carvana is a leading e-commerce platform for buying and selling used cars, helping explain why the stock benefited nicely during the COVID-19 era when consumers were unsure of leaving their homes. A risk-on environment fueled by a low-interest rate regime also helped benefit the company in a big way.

The company’s earnings outlook melted higher following its latest set of better-than-expected results, helping land the stock into the highly-coveted Zacks Rank #1 (Strong Buy) rating.
 

Image Source: Zacks Investment Research

Concerning headline figures in its latest print, Carvana delivered a sizable 180% beat relative to the Zacks Consensus EPS estimate and reported sales 5% ahead of expectations, reflecting growth rates of 178% and 31%, respectively.

As shown below, the company’s top line has began showing sequential growth over recent quarters following a rough 2023 performance.
 

Image Source: Zacks Investment Research
 

The company overall enjoyed a robust quarter, with retail units of 108.6k growing a sizable 34% year-over-year alongside reaching new profitability milestones. Further, the company’s adjusted EBITDA margin of 11.7% reflected a new all-time best for public automotive retailers.

The adjusted EBITDA margin performance is quite commendable, reflecting that the company has been effectively managing costs related to operations, inventory, and labor, which do fluctuate quite a bit in the automotive industry. And the company now forecasts adjusted EBITDA significantly above the high end of previous guidance, another bullish sign.

The stock is up a remarkable 350% in 2024, with the recent set of results further boosting returns. The price action here is just nearly unbelievable, particularly when considering how the company was seemingly forgotten about post-pandemic for quite some time.
 

Image Source: Zacks Investment Research

Still, it’s worth pointing out here that short squeezes have also been a driver behind the pop in shares, with a current short interest of 6% nowhere near the 17.5% mark in just December of 2023.

Image Source: Zacks Investment Research

Putting Everything Together

Carvana (CVNA - Free Report), a loved stock during the pandemic era, has made a huge comeback over the last year after being shoved to the side. Strong quarterly results have fueled the comeback, with Carvana shares commonly popping post-earnings.

The valuation picture here is quite rich, but that’s reflective of investors’ big growth expectations. For its current fiscal year, EPS is expected to climb 40% alongside a 24% sales increase.  

The stock has seen a massive run, and positive earnings estimate revisions stemming from robust quarterly results make it an attractive option for those seeking momentum.

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