Carvana (CVNA) Used Units Could Cause a Short Squeeze - Needham

Needham & Company analyst Brad Erickson reiterated a Buy rating and $105.00 price target on Carvana (NYSE: CVNA) on the belief that 2020 used unit expectations will be the key determinant for the stock's performance and possibly cause a short squeeze.

The analyst's proprietary cohort analysis suggests "this business can become a lot bigger over time given 40M addressable units and 30% of the market yet to be entered. So while upside to unit expectations appear less likely in the near-term, we find the Street's GPU expectations particularly conservative for next year where we think it's possible the company could be exiting the year as a profitable entity". Addressing stock price performance, the analyst stated "While we think the bar has risen meaningfully in front of the 2020 guide, we also believe the shorts will be forced to tap out longer-term and thus, we remain Buy-rated".

For an analyst ratings summary and ratings history on Carvana click here. For more ratings news on Carvana click here.

Shares of Carvana closed at $91.96 yesterday.

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