Carvana (CVNA) Plunges 3.15% Amid Earnings Optimism and Guidance Concerns: What’s Fueling the Selloff?

Summary
• Carvana (CVNA) tumbles 3.15% to $321.865, trading below its 52-week high of $413.33
• Earnings beat of $1.50 EPS and $5.65B revenue fail to offset weak Q4 retail unit guidance
• Options activity surges, with 5594 contracts traded on the CVNA20251114P320 put option
• RSI at 46.64 and MACD -9.74 signal bearish momentum despite strong top-line growth

Carvana’s shares face a sharp intraday decline as investors weigh record revenue against muted guidance for retail unit sales. The stock’s 3.15% drop to $321.865 reflects a tug-of-war between bullish earnings results and bearish forward-looking concerns. With options volatility spiking and technical indicators pointing to short-term weakness, the market is recalibrating its expectations for the e-commerce auto retailer.

Earnings Beat Overshadowed by Guidance Dampening
Carvana’s 3.15% intraday decline stems from a disconnect between its record Q3 results and cautious Q4 guidance. While the company reported a 55% YoY revenue surge to $5.65B and adjusted EBITDA of $637M, management’s forecast for 150k+ retail units in Q4—down from 155,941 in Q3—spooked investors. The sell-off intensified as Citi slashed its price target to $445 from $490, and the stock’s 52-week high of $413.33 remains out of reach. Rising auto loan delinquencies and margin pressures further cloud the outlook, despite Carvana’s 60.8% YTD rally.

Automotive Retail Sector Weakness Amplifies CVNA’s Slide
The automotive retail sector, led by Carmax (KMX), mirrors Carvana’s bearish trend. KMX’s -1.45% intraday drop underscores broader concerns about inventory management and used vehicle pricing. While Carvana’s digital model offers efficiency, sector-wide challenges—such as tightening credit and slowing demand—weigh on all players. However, Carvana’s 95.48x dynamic P/E ratio remains elevated compared to peers, amplifying sensitivity to guidance revisions.

Options and ETF Plays for CVNA’s Volatile Outlook
• 200-day MA: $297.87 (below current price), RSI: 46.64 (neutral), MACD: -9.74 (bearish)
• Bollinger Bands: Upper $378.48, Middle $343.37, Lower $308.26 (price near lower band)
• Support/Resistance: 30D $353.85–355.66, 200D $344.19–348.84

Carvana’s technicals suggest a short-term bearish bias, with key support at $310 (Bollinger lower band) and resistance at $344 (200D MA). The stock’s 60.79% implied volatility and 1.24% turnover rate highlight its volatility. For options, the CVNA20251114P320 put (strike $320, expiration 11/14) and CVNA20251114C320 call (strike $320, expiration 11/14) stand out:

• CVNA20251114P320 (Put):
- Delta: -0.4613 (moderate bearish exposure)
- IV: 61.17% (high volatility)
- Theta: -0.0111 (slow time decay)
- Gamma: 0.0116 (responsive to price swings)
- Turnover: 7.65M (high liquidity)
- Leverage: 25.03% (moderate leverage)
- Payoff (5% downside): $321.865 → $305.77 → max profit $14.23 per contract
- Why it works: High IV and liquidity make this put ideal for capitalizing on a potential breakdown below $310.

• CVNA20251114C320 (Call):
- Delta: 0.5388 (moderate bullish exposure)
- IV: 62.63% (high volatility)
- Theta: -1.2246 (rapid time decay)
- Gamma: 0.0114 (responsive to rebounds)
- Turnover: 394,799 (high liquidity)
- Leverage: 21.92% (moderate leverage)
- Payoff (5% downside): $321.865 → $305.77 → max profit $14.23 per contract
- Why it works: High gamma and IV position this call to benefit from a rebound above $344, despite bearish bias.

Action: Aggressive bulls may consider CVNA20251114C320 into a bounce above $344. If $310 breaks, CVNA20251114P320 offers short-side potential.

Backtest Carvana Stock Performance
I ran into an internal error when the event-backtest engine tried to process the dates list—it looks like no valid events were handed to the engine, which caused it to crash. The root cause is that we need open & low prices to measure an “intraday -3 % plunge”, but the dataset we pulled only contained derived technical fields (moving averages, MACD, etc.) without the raw OHLC columns. Consequently, no dates met the filter and the engine returned an empty set.To move forward we have two options:1. Pull full daily OHLCV data (Open / High / Low / Close / Volume) for CVNA and re-generate the event list using the true intraday drop formula drop = (Low − Open) ÷ Open ≤ −3 %.2. If you’re comfortable with a close-to-close proxy instead (i.e., days when Close fell at least 3 % from the previous Close), we can quickly re-run the back-test with that definition—this avoids the extra data pull and is often a reasonable approximation when intraday bars aren’t required.Please let me know which path you prefer (1: true intraday using Open/Low or 2: close-to-close proxy), and I’ll proceed accordingly.

CVNA’s Crossroads: Rebound or Reassessment?
Carvana’s 3.15% drop reflects a market recalibrating its growth narrative amid macroeconomic headwinds. While the stock’s 55% YoY revenue growth and $637M EBITDA are compelling, guidance revisions and rising delinquencies demand caution. Investors should monitor the $310 support level and $344 resistance for directional clues. With KMX down 1.45%, sector-wide pressures persist. For now, the CVNA20251114P320 put and CVNA20251114C320 call offer strategic exposure to both bearish and bullish scenarios. Watch for $310 breakdown or a rebound above $344 to dictate next steps.