1/
Rob Vinall’s recent purchase of $CVNA and the huge drawdown of the share price has made me finally look into the business that every growth investor has been raving about for years now.
Carvana’s share price is down ~60% from their all-time high.
Rob Vinall’s recent purchase of $CVNA and the huge drawdown of the share price has made me finally look into the business that every growth investor has been raving about for years now.
Carvana’s share price is down ~60% from their all-time high.
2/
Revenues for Carvana have grown at a ~112% CAGR over the past 5 years. Which is a pretty insane number, it’s hard to even comprehend.
The revenue growth is obviously unsustainable, but there is still a long runway for growth for $CVNA
Revenues for Carvana have grown at a ~112% CAGR over the past 5 years. Which is a pretty insane number, it’s hard to even comprehend.
The revenue growth is obviously unsustainable, but there is still a long runway for growth for $CVNA
3/
Currently only 1% of used car sales in the US are e-commerce sales. JP Morgan forecast that number to increase to 12% by 2030.
$CVNA have around 40% market share of e-commerce used car sales. If* they maintain that market share we could see >30% sales CAGR until 2030.
Currently only 1% of used car sales in the US are e-commerce sales. JP Morgan forecast that number to increase to 12% by 2030.
$CVNA have around 40% market share of e-commerce used car sales. If* they maintain that market share we could see >30% sales CAGR until 2030.
4/
Used car sales in the US have grown at a 6.5% CAGR over the past 10 years. Even this organic growth alone is an appealing for $CVNA. Assuming trends continue, you could add that onto the potential revenue growth of ~30%.
Used car sales in the US have grown at a 6.5% CAGR over the past 10 years. Even this organic growth alone is an appealing for $CVNA. Assuming trends continue, you could add that onto the potential revenue growth of ~30%.
5/
Currently $CVNA trade at about 1.5x sales. On a forward basis that multiple might be <1x sales.
They’re currently still unprofitable. Management expect 8-14% EBITDA margin long-term. But I don’t know the industry or business well enough to know if that’s achievable
Currently $CVNA trade at about 1.5x sales. On a forward basis that multiple might be <1x sales.
They’re currently still unprofitable. Management expect 8-14% EBITDA margin long-term. But I don’t know the industry or business well enough to know if that’s achievable
6/
it’s hard to make any long-term forecast of cash flows. After some more work it might be appealing.
Revenue CAGR over 5-10 years is likely >25% conservatively. Assuming competition or debt doesn’t ruin everything.
it’s hard to make any long-term forecast of cash flows. After some more work it might be appealing.
Revenue CAGR over 5-10 years is likely >25% conservatively. Assuming competition or debt doesn’t ruin everything.
7/
The fact that Rob Vinall and Cliff Sosin own $CVNA and that the share price has plummeted 60% suggests it’s worth digging more.
My first surface level look suggests it got a long runway for high growth rates, but with a lot of uncertainty.
The fact that Rob Vinall and Cliff Sosin own $CVNA and that the share price has plummeted 60% suggests it’s worth digging more.
My first surface level look suggests it got a long runway for high growth rates, but with a lot of uncertainty.
8/
It’s probably not the type of company I’d invest in. But I’ll keep it on my secondary watchlist for now and see what happens over the next 12 months.
Would love to hear from any $CVNA bulls. Share any interesting resources you have.
It’s probably not the type of company I’d invest in. But I’ll keep it on my secondary watchlist for now and see what happens over the next 12 months.
Would love to hear from any $CVNA bulls. Share any interesting resources you have.
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