CVNA

Investment Analysis Clubs Saul’s Investing Discussions
1

I reported the previous post. Didn’t finish it, and the formatting was a mess. Sorry. Try again:

I note this was broached back in 2019. Not much since then that I can find. Carvana is not a SAAS stock at all. What grabbed my attention was the YoY numbers I saw online. For example, revenue:


(USD)       Mar-21   Y/Y    Dec-20      Y/Y     Sep-20   Y/Y   Jun-20   Y/Y
Revenue     2.24B  104.46%   1.83B    65.50%    1.54B  40.99%   1.12B  13.40%
Net income   -36M   40%    -63.34M    53.98%   -7.08M  76.45% -40.83M 100.91%
Net profit  -1.60%  70.70%  -3.47%     6.97%   -0.46%  83.27%  -3.65%  77.18%
 margin
Operating    -59M   57.25% -98.81M     0.98%   -6.57M  90.27% -89.73M 110.46% 
income
Net change    86M  218.52% 132.79M  1229.87% -169.96M 357.22% 221.25M 442.18%
 in cash
Cash on hand 370M  410.80% 300.81M   295.72%   173.7M  82.96%  246.3M 512.68%
Cost of     1.91B   98.80%   1.58B    64.74%	1.28B  33.98% 968.13M  14.11%
 revenue

So last year’s June qtr they had YoY growth of 13.4%, then Sept quarter 40.99%, then Dec qtr 65.5%, and then March at 104.46%. That’s moving in the right direction. However, net income growth seems to be going the wrong direction, and is all negative. Net profit is also negative, and YoY is all over place. But they seem to be accumulating cash. I’ll have to dig deeper to see if that is from debt or additional public offerings, or someplace else.

Also, cost of revenue is going up. From what I can tell, that may be in large part due to expansion. It costs money to build/acquire office space, and hire people. And they seem to be expanding a lot.

The reason I post this is that some of the numbers seem to be worthy of Saul-like consideration, and others don’t. Is this perhaps a pre-Saul-numbers stock? That is, are they in the early stages of becoming a Saul-stock, or are they just flailing about? Looking at the Y/Y numbers per quarter (since there may be seasonal effects, so I think it is better to compare to last year’s quarter), they seem to be growing revenue, improving their income, and generating cash. But overall they’re still in the red.

It will also be interesting as this year plays out to see Y/Y numbers since 2020 was definitely an aberration. Not sure a lot of people were car shopping last year.

1poorguy (no position in CVNA; I do know someone who works there, but that wouldn’t get me to buy or even tout their stock, it just made me look)

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2

Just a quick follow-up. I found debt numbers. Page 63:

https://investors.carvana.com/~/media/Files/C/Carvana-IR/doc….
Annual long term debt has been increasing every year since 2016, and was almost $1.7B in 12/31/20. Net loss per share has been increasing annually, though gross profit per unit is on the rise, and markets have increased dramatically. EBITDA is -148K.

The stock price has been doing well recently, up roughly 40% since Jan 1, and up over 100% from 1 year ago. However, prior to 2020 growth in stock price was slow.

Also used this source: https://finance.yahoo.com/quote/cvna/financials/

1poorguy (no position in CVNA, still evaluating, but it doesn’t seem to me to be a slam-dunk)

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3

Hi all,

This is my first post here. I have been reading the board off and on but have not felt that I had anything valuable to add.

I think Carvana’s recent success is mostly a transient COVID phenomenon. The demand for personal vehicles has surged at a time when production of new vehicles has been sharply curtailed. These are both temporary circumstances. Carvana is seen as the COVID safe way to buy a used car and as a result they’ve seen tremendous growth.

I seriously doubt that Carvana can sustain anywhere near recent levels of growth. I rate CVNA as a speculative pick worth watching but at least personally not worthy of my captial.

Mark

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