Why Carvana Stock Plunged Nearly 39% Last Month
Shares of used car e-commerce company Carvana (NYSE: CVNA) were down 38.5% in September, according to data provided by S&P Global Market Intelligence. Surprisingly, there were few fundamental changes to the business during the month despite the huge change in the price per share. Nevertheless, it did drastically underperform the market's negative 9% return.
If anything, Carvana had relatively positive developments in September. For example, it was upgraded by an analyst on Sept. 12. According to The Fly, Piper Sandler analyst Alexander Potter called Carvana a "grossly undervalued" stock and gave it a price target of $73 per share. Typically, something like that can lead to a stock overperforming in a given month because it instills investor confidence.
Additionally, on Sept. 22, Carvana announced that its credit arrangement with Ally Financial had been increased and lengthened, giving the car company more liquidity and a longer period to use it. The credit arrangement helps Carvana manage its used car inventory, so this can also be seen as positive news.
Source Fool.com
