$CVNA Updated Data. When you dig into the numbers you will see things look very bad for the company in terms of growth prospects and unit margins.
1) Here is the QoQ and YoY Data and Trends.
-Declining GP Margin is not a new trend it is clearly an issue for the company that started in Q3-2019.
-Declining GP in total is a new trend this quarter.
-Even more surprising is Revenue is now declining, on a QoQ basis.
-Declining GP Margin is not a new trend it is clearly an issue for the company that started in Q3-2019.
-Declining GP in total is a new trend this quarter.
-Even more surprising is Revenue is now declining, on a QoQ basis.
2) To put in perspective just how bad Q1 2020 was, look at the last 4 years Q1 QoQ growth rates. Seasonality would dictate you should see a big jump in Q1 over Q4. But Q1 2020 is down 28% vs 2019 QoQ growth rates.
3) Looking at YoY and QoQ Growth Rates over time add you see YoY is converging with QoQ. Expect 15%-20% growth at best from here on out from a YoY basis.
4) Unit Margins, they do a chart for themselves and its not pretty. What they don't highlight though, is this trend started 3 Quarters ago and it just accelerating now.
5) Their long term model is clearly a pipe dream. There is no way they can really scale below 5% advertising in the Google and Facebook dominated advertising landscape.
Long term margins are 1-3% not 8-13.5% like they show in every earnings release.
Long term margins are 1-3% not 8-13.5% like they show in every earnings release.
