Is Cvna good stock to buy?
8/4/2024 06:14pm
**Carvana (CVNA) is not a good stock to buy at this time**, based on the following analysis:
1. **Financial Performance**: CVNA's net income has increased by 145.71% year-on-year, and its revenue has grown by 14.89%. However, the company's diluted earnings per share (EPS) have decreased by 39.13% quarter-over-quarter. This decline in EPS growth rate, despite strong revenue growth, could indicate that the company's profitability is being impacted by rising costs or other factors.
|Ticker|Name|Net Income year-on-year growth rate|Total Revenue year-on-year growth rate|Diluted EPS QoQ growth rate|Date|code|market_code|
|---|---|---|---|---|---|---|---|
|CVNA.N|Carvana|145.7142857142857|14.892183288409703|-39.13043478260869|20240630|CVNA|169|
2. **Valuation**: CVNA's price-to-earnings (P/E) ratio is 39.77, which is relatively high, suggesting that the stock may be overvalued. Additionally, the company's price-to-sales (P/S) ratio is 2.19, and its price-to-book (P/B) ratio is 53.98, both of which are above industry averages, indicating that the stock may be trading at a premium compared to its sales and book value.
|Ticker|Name|Price to Book Ratio|P/S|P/E(TTM)|Date|code|market_code|
|---|---|---|---|---|---|---|---|
|CVNA.N|Carvana|53.97843375969582|2.193838367918405|39.765624|20240802|CVNA|169|
3. **Debt Levels**: CVNA's debt-to-equity ratio has increased to 49.59, which is a significant increase from the previous quarter's ratio of 19.33. A high debt-to-equity ratio can indicate that the company is relying on debt financing, which can lead to higher interest expenses and potentially impact its profitability.
|Ticker|Name|Debt-to-Equity Ratio|Date|code|market_code|
|---|---|---|---|---|---|
|CVNA.N|Carvana|19.796791443850267|20220930|CVNA|169|
|CVNA.N|Carvana|-7.8907882241215574|20221231|CVNA|169|
|CVNA.N|Carvana|-6.397125567322239|20230331|CVNA|169|
|CVNA.N|Carvana|-5.620199146514936|20230630|CVNA|169|
|CVNA.N|Carvana|-29.376237623762375|20230930|CVNA|169|
|CVNA.N|Carvana|-16.3359375|20231231|CVNA|169|
|CVNA.N|Carvana|-19.334405144694532|20240331|CVNA|169|
|CVNA.N|Carvana|49.59130434782609|20240630|CVNA|169|
4. **Market Sentiment**: The consensus among analysts is a "Neutral" with an average price target of $130.41, which is below the current price, indicating that analysts do not see any significant upside potential in the stock.
In conclusion, while CVNA has shown strong revenue growth, the decline in EPS growth rate, the high valuation metrics, and the increase in debt levels raise concerns about its profitability and growth potential. The "Neutral" consensus among analysts further suggests that the stock may not be a good buy at this time.