By Claudia Assis
The online used-car retailer’s stock has gained more than 50% over a 12-day winning streak, and is aiming for an all-time high
The Carvana-sponsored #84 Carvana Chevrolet, driven by Jimmie Johnson, at a Nascar race in 2023. Carvana’s stock has more than doubled this year.
Carvana’s stock has caught a boost from the company’s soon-to-come inclusion in the S&P 500 index – and then some.
Shares of Carvana (CVNA) on Wednesday ended at a fresh all-time high and extended their winning streak to a 12th session, their longest run on record. The stock is up 51% over that stretch.
S&P Dow Jones Indices announced late Friday that the online used-car retailer and two other companies will join the S&P 500 SPX before the market open on Dec. 22 – leapfrogging companies such as Marvell Technology (MRVL) and Strategy (MSTR), which also were thought to be candidates for inclusion.
A place in the S&P 500 is a coveted spot for companies as it exposes their shares to a much broader range of investors, including passive funds that track the equity benchmark and actively managed funds that may have restrictions on where they can invest.
Carvana’s market cap hovered at $102 billion on Wednesday, topping the $100 billion threshold for the first time. At its 2022 low, the company had a market cap of $703 million.
Carvana is a bit of a Cinderella story: It was a struggling business in late 2022 and part of 2023, beset by a cash crisis followed by a bankruptcy-dodging deal with bondholders in July 2023.
Since then, however, the company has carved out a comfortable and lucrative space for itself. Wall Street often praises its competitive advantages and potential for market-share growth in the fragmented used-car-sales industry. And competition from the likes of Amazon.com’s (AMZN) Amazon Autos is viewed as being far off in the future, if it all.
See also: Carvana survived a debt crunch. Can it survive Amazon?
Carvana has eye-catching “car vending machines” in key cities and offers buyers a still-novel way to shop from home for a used car, without haggling. And it delivers cars to buyers, sometimes on the same day, depending on the city.
While many people may be hesitant to buy a car 100% online, more are now willing to do it – especially younger consumers, who might not be willing to negotiate prices and want the process to be as quick and painless as possible.
Carvana shares have gained 130% this year, after an advance of nearly 300% last year and an eye-popping run of 1,017% in 2023.
The company finds itself in a “Goldilocks scenario,” analysts at Deutsche Bank said in a recent note.
A meaningful portion of Carvana’s infrastructure is already in place and under capacity, and “substantial fixed operating leverage” across its network is likely to allow it to both reinvest into its “market-leading competitive moats” and also deliver margin expansion, the analysts wrote.
-Claudia Assis
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12-10-25 1721ET
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