Carvana (CVNA) Puts and Takes Support the Bull Thesis - Needham & Company

Needham & Company analyst Brad Erickson reiterated a Buy rating and $100.00 price target on Carvana (NYSE: CVNA) after the company reported a dramatic rebound in sales from down 30% in the second week of April to 20-30% growth the past few weeks. Possible concerns are i) that this level is lower than necessary to support the high-multiple and ii) GPU expansion is impaired for a few quarters and iii) the company may need to raise capital to stave off liquidity concerns again in 6-12 months.

The analyst sees this as a positive mix falling to the bulls stating "So long as fixed income (FI) investors' desire for the hugely predictable stream of cash flows from used car loans persists, we expect equity investors to increasingly realize that a digitally-native, online marketplace is the most efficient car retailing enterprise of the future to drive loan origination growth for those FI investors and therefore deserving of a premium multiple".

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 $91.15 yesterday.

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