My Biggest Concern With Carvana

Consumers in the United States buy more than 30 million used cars each year. Carvana (NYSE: CVNA) is trying to give the used car buying process an e-commerce touch, striving for click-to-buy ease, no haggling, and no spending hours at the dealership.

The company went public in 2017, and its stock has been a winner, up almost 500% over the past five years, despite falling to near 52-week lows amid the bear market in growth and tech stocks. However, there's one potential problem with Carvana that investors should know about before buying shares.

Carvana is a rapidly growing company; revenue growth has averaged 103% annually over the past five years. But unfortunately, growing companies often lose money because they heavily spend on hiring employees and marketing to grow the business.

Continue reading

Source Fool.com