© Reuters Carvana (CVNA) ‘heading in the right direction’ – JMP Securities
The Carvana Co. (NYSE:) price target was doubled to $50 from $25 per share at JMP Securities on Wednesday, with analysts maintaining a Market Outperform rating on the stock.
They said the firm still likes Carvana despite unit pricing volatility driving uncertain second-half trends.
“Stocks within our online auto coverage have significantly outperformed the broader market YTD given operational improvements amid the industry’s ongoing stabilization,” explained the analysts. “While CVNA’s upper funnel trends continue to face the most challenges, the company appears to be heading in the right direction as it progresses toward positive adj. EBITDA and positive free cash flow.”
The analysts added that after CVNA released updated 2Q guidance, expectations are now likely set for the quarter, and investors will focus on the durability of GPU trends into 2H23.
“As CVNA progresses toward durable positive adjusted EBITDA and significant positive unit economics, focus will increasingly shift to when investors can expect a return to growth, which we believe can be a material catalyst to its share price,” they added.
