Where Will Carvana Stock Be in 1 Year?
Carvana's (NYSE: CVNA) stock hit an all-time high of $370.10 on Aug. 10, 2021. Investors were impressed by the online used car dealer's robust revenue growth, expanding gross margins, and narrowing losses. Carvana benefited from the post-pandemic acceleration in auto sales, even challenging traditional dealerships with its online platform that simplified the financing process, set firm prices, and enabled its customers to "get the car without the car salesman."
But by the end of 2022, Carvana's stock had dropped below $5 a share. Used car prices fell sharply as the vehicle shortage turned into a supply glut, inflation curbed consumer spending on big-ticket items like cars, and rising interest rates made it more difficult to finance those purchases. Carvana's lack of profits, high debt, and dwindling liquidity also made it a risky stock to own as interest rates continued to rise.
Does this beleaguered stock actually have a chance to bounce back over the next 12 months?
Source Fool.com
