Carvana Debate Deepens as Needham Reaffirms $500 Target After Volatile Post‑Earnings Week
A lead analyst says subprime-related pressures look temporary, already reflected in projections.
Overview
- Carvana’s Q3 results showed 55% revenue growth, operating margin expansion, and reduced debt, underscoring a continuing operational turnaround.
- Needham’s Chris Pierce maintained a Buy rating and a $500 price target, arguing that weakness in Other gross profit per unit tied to financing and service products is transitory.
- Short seller Jim Chanos highlighted “red flags” following Tricolor Holdings’ bankruptcy, and the stock fell about 13% on Oct. 22 after his comments.
- Trading remains volatile as investors weigh sector delinquencies against improved execution, with the stock carrying a high beta near 3.6.
- JPMorgan raised its price target to $490 on Oct. 21 and placed the shares on a positive watch ahead of the Q3 print, citing operational strength.