Carvana’s (CVNA) stock spiked 284% in 2024 despite facing bankruptcy risks in 2022 and 2023, with “investors believing the company’s worst days are behind it,” Hindenburg Research stated in a newly-published short report. However, the firm’s research shows “Carvana’s turnaround is a mirage,” according to the firm, which says its research “uncovered $800 million in loan sales to a suspected undisclosed related party, along with details on how accounting manipulation and lax underwriting have fueled temporary reported income growth – all while insiders cash out billions in stock.” The short-seller adds: “Even before considering the findings of our investigation, Carvana is exorbitantly valued, trading at an 845% higher sales multiple relative to online car peers CarMax and AutoNation, and a 754% premium on a forward earnings basis. The company has ~$4.8 billion in net debt and is junk-rated by ratings agencies… Overall, we think the Garcias will leave shareholders with nothing. At any point in Carvana’s two incredible stock runs, it could have raised significant capital and de-risked its balance sheet.”
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Read More on CVNA:
- Hindenburg releases short report on Carvana
- Stephens lays out 21 Best Ideas for 2025
- Carvana price target raised to $330 from $300 at Needham
- Carvana plans for auction and reconditioning ‘Megasite’ integration in Boston
- Carvana expands same day delivery to Las Vegas
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
