Carvana (CVNA) Surges 1.75% Amid Strategic Shifts and Lending Scrutiny – What’s Next?

Summary
• Carvana’s stock (CVNA) trades at $322.79, up 1.75% intraday, with a 52-week range of $148.25–$413.33.
• Recent strategic partnerships and Q3 revenue beat drive optimism, but Hindenburg’s report on subprime lending raises red flags.
• Options activity intensifies, with high-IV contracts like CVNA20251128P315 and CVNA20251128C335 attracting attention.

Carvana’s volatile 62% YTD rally has collided with mounting concerns over its lending practices and solvency risks. Today’s 1.75% gain reflects a tug-of-war between bullish earnings momentum and bearish regulatory scrutiny. With the stock trading near its 200-day moving average and key options expiring Friday, traders are bracing for a pivotal week.

Strategic Partnerships and Earnings Optimism Clash with Lending Concerns
Carvana’s 1.75% intraday gain stems from a mix of strategic optimism and operational skepticism. The company’s recent partnerships and Q3 revenue beat (up 54.5% YoY) have fueled short-term bullish sentiment. However, Hindenburg Research’s report—highlighting 80% of loans in deep subprime territory and a 99% approval rate—has reignited fears of a lending crisis. Analysts remain split: while earnings growth is projected to surge 78% next year, the stock’s 72.6x PE ratio and 50.64x price-to-book ratio suggest overvaluation. This duality drives a volatile price action, with traders hedging against both growth and collapse.

Automotive Retail Sector Volatility as Carvana Outperforms Peers
The automotive retail sector has underperformed YTD, with consumer discretionary ranking fourth-worst in the S&P 500. Carmax (KMX), the sector’s leader, rose 1.4% today, but Carvana’s 62% YTD gain dwarfs its peers. This divergence reflects Carvana’s aggressive digital transformation and high-risk, high-reward business model. While traditional dealerships focus on inventory and margins, Carvana’s reliance on subprime lending and loan securitization creates unique volatility. The sector’s broader struggles with used vehicle price declines and rising delinquencies further amplify Carvana’s exposure.

Options Playbook: Leveraging Volatility with CVNA20251128P315 and CVNA20251128C335
• 200-day MA: $301.93 (below current price); RSI: 39.62 (oversold); MACD: -8.71 (bearish divergence).
• Bollinger Bands: Upper $364.10, Middle $325.17, Lower $286.25 (price near middle band).

Carvana’s technicals suggest a short-term bullish bias, with key support at $286.25 and resistance at $364.10. The stock’s 17.7% overvaluation per DCF analysis and 72.6x PE ratio imply a potential correction, but near-term momentum favors buyers. For options, CVNA20251128P315 and CVNA20251128C335 stand out:

• CVNA20251128P315 (Put): Strike $315, Expiry 11/28, IV 56.48%, Leverage 38.14%, Delta -0.38, Theta -0.033, Gamma 0.0127. High IV and moderate delta offer downside protection if the stock breaks below $315.
• CVNA20251128C335 (Call): Strike $335, Expiry 11/28, IV 62.97%, Leverage 38.59%, Delta 0.379, Theta -1.107, Gamma 0.0113. Strong gamma and IV suggest potential for rapid premium growth if the stock rallies above $335.

Payoff estimates: A 5% upside to $339.93 would yield $14.93 for CVNA20251128C335 (vs. $322.79 base). Aggressive bulls may consider CVNA20251128C335 into a breakout above $335, while cautious bears should monitor CVNA20251128P315 for a breakdown below $315.

Backtest Carvana Stock Performance
I have completed the event-driven backtest you requested. Below is an interactive module that summarizes the results and lets you explore the 30-day performance following each ≥ 2 % daily surge in CVNA from 2022-01-01 to 2025-11-19.Key findings (high-level):• 300 events detected. • Average excess return over 30 trading days ≈ +0.9 % vs benchmark, but none of the daily differences reached statistical significance. • Win rate drifts from ~49 % on day 1 to ~60 % by day 30, yet the edge remains weak. Feel free to explore the module for full metrics, and let me know if you’d like deeper cuts (e.g., by market regime, larger thresholds, or alternative holding windows).

Bullish Breakout or Correction? Key Levels to Watch
Carvana’s 1.75% gain today reflects a fragile balance between earnings optimism and regulatory risks. The stock’s 72.6x PE and 50.64x price-to-book ratios suggest overvaluation, but short-term momentum remains intact. Traders should monitor the 200-day MA ($301.93) and Bollinger Bands (lower $286.25, upper $364.10) for directional clues. If the stock breaks above $335, CVNA20251128C335 offers high leverage. Conversely, a breakdown below $315 could trigger a sell-off. Sector leader Carmax (KMX) rose 1.4% today, signaling mixed retail sector sentiment. Watch for $315 support or regulatory updates—either could define CVNA’s next move.