1 Number Carvana Investors Should Be Worried About
Whether you believe in Carvana's (NYSE: CVNA) potential or think it's doomed, most investors are aware it has a serious cash burn problem and that its growth has come to a crashing halt. However, it has an equally big problem some overlook: its soaring interest expense.
Let's explain Carvana's interest expense problem and compare it to rival CarMax (NYSE: KMX), which has more than twice the debt but a small fraction of the interest expense concern.
Let's first look at a graph that emphasizes not only how quickly Carvana's interest expense has soared but compares it to cash and cash equivalents and also shows why it's worse than it looks.
Source Fool.com
