A Closer Look at Carvana Stock With Seth Basham, Wedbush Securities

Benzinga

Benzinga's Premarket Prep had retail specialist Seth Basham from Wedbush Securities on today's show to discuss some retail names including Carvana and how he sees it playing out into year end.

Transcript

00:00What about this Carvana story here, because I see you cover CVNA and this has got to be

00:05one of the biggest turnarounds that I've ever seen in my 25 years of professional trading.

00:11This stock went from $376 in 2021 down to like three bucks.

00:17So it looked like everybody, even the debt was trading, you know, way down, it looked

00:20like everybody thought the writing was on the wall here, this current stock's going

00:23down.

00:24Nope.

00:25Lo and behold, the turnaround story has come and it is real and the stock is now making

00:29new 52-week highs once again, back to $197.

00:34Wow, is this story real?

00:36This is the most crowded long in my space into earnings for sure.

00:42So they definitely have gotten their act together, they've made a ton of improvements with their

00:48operations and they're really the leaders when it comes to online used car retail as

00:54a couple of their competitors have gone out of business over the last year, including

00:58Vroom and Shift.

01:00So they're left standing, they've gained market share, they've fixed their operations.

01:06They've also expanded their credit box and moved to lower priced vehicles.

01:10Those two things, I don't think people fully appreciate how much they've helped sales over

01:14the course of the last year.

01:15They're going to start to annualize some of those benefits here, moving into the fourth

01:18quarter.

01:19And they also have some potential issues in terms of profitability associated with loans

01:24that they sell after they make those to retail buyers.

01:29So we see a couple of speed bumps ahead here and given such a high bar for the third quarter

01:35earnings and outlook for the balance of the year, we're not pressing long into this print.

01:40We take the other side of that trade.

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