Down 97% From 2022 Highs, 1 Thing Carvana Stock Can Teach Investors
Last year was a huge wake-up call for many businesses, especially Carvana (NYSE: CVNA). It leaned heavily on ultra-loose monetary policy to fund its unprofitable growth over much of the past decade. Elevated inflation forced the Federal Reserve to rapidly hike interest rates, and it has created a softer macro environment that completely changed the company's prospects in a short amount of time. Shares have plummeted as a result.
But just because Carvana's stock is down a whopping 97% since the start of 2022, it doesn't mean that shareholders who are sitting on unrealized (or realized) losses right now can't still learn from a potential mistake. In fact, here is one important thing that Carvana's impressive rise and now pronounced struggles can teach investors.
Carvana's growth prior to 2022 was absolutely dizzying. In 2014, the e-commerce used car retailer posted revenue of $42 million and sold 2,105 cars. In 2021, Carvana was able to generate revenue of $12.8 billion, with 425,237 retail units sold. And these ridiculous gains attracted investors to the company that was disrupting the massive $1.2 trillion U.S. used car industry.
Source Fool.com
