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Carvana (CVNA)

Founded in 2012 and based in Phoenix, Carvana's mission is to change the way people buy cars. By removing the traditional dealership infrastructure and replacing it with technology and exceptional customer service, Carvana offers consumers an intuitive and convenient online car buying and financing platform. Carvana.com enables consumers to quickly and easily shop more than 20,000 vehicles, finance, trade-in or sell their current vehicle to Carvana, sign contracts, and schedule as-soon-as-next-day delivery or pickup at one of Carvana's patented, automated Car Vending Machines.

Company profile

Ticker
CVNA
Exchange
Website
CEO
Ernest Garcia
Employees
Incorporated
Location
Fiscal year end
SEC CIK
Subsidiaries
Carvana Co. Sub LLC • Carvana Group, LLC • Carvana, LLC ...
IRS number
814549921

CVNA stock data

Investment data

Data from SEC filings
Securities sold
Number of investors

Calendar

4 Aug 22
28 Sep 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 1.2B 1.2B 1.2B 1.2B 1.2B 1.2B
Cash burn (monthly) (no burn) (no burn) 109.67M 76.08M (no burn) 161.83M
Cash used (since last report) n/a n/a 323.95M 224.75M n/a 478.05M
Cash remaining n/a n/a 873.05M 972.25M n/a 718.95M
Runway (months of cash) n/a n/a 8.0 12.8 n/a 4.4

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
1 Sep 22 Ryan S. Keeton Class A Common Stock Payment of exercise Dispose F No No 32.78 64 2.1K 106,077
1 Sep 22 Ernest C. Garcia Iii Class A Common Stock Payment of exercise Dispose F No No 32.78 133 4.36K 802,373
1 Sep 22 Benjamin E. Huston Class A Common Stock Payment of exercise Dispose F No No 32.78 119 3.9K 28,125
1 Sep 22 Daniel J. Gill Class A Common Stock Payment of exercise Dispose F No No 32.78 124 4.06K 130,690
13F holders Current Prev Q Change
Total holders 314 390 -19.5%
Opened positions 51 72 -29.2%
Closed positions 127 116 +9.5%
Increased positions 153 145 +5.5%
Reduced positions 58 103 -43.7%
13F shares Current Prev Q Change
Total value 3.65B 17.43B -79.1%
Total shares 143.88M 128.04M +12.4%
Total puts 9.53M 4.61M +106.9%
Total calls 11.26M 4.07M +176.8%
Total put/call ratio 0.8 1.1 -25.3%
Largest owners Shares Value Change
TROW T. Rowe Price 20.1M $453.88M +49.7%
Baillie Gifford & Co 10.9M $246.16M +15.0%
CVAN 9.35M $0 0.0%
Vanguard 8.89M $200.69M +21.8%
Garcia Ernest C Ii 8M $176.08M 0.0%
CAS Investment Partners 6.73M $151.91M +61.6%
Spruce House Investment Management 6.15M $138.87M +23.0%
FMR 5.66M $127.79M -45.8%
MS Morgan Stanley 5.2M $117.48M -27.4%
BLK Blackrock 5.1M $115.19M +31.2%
Largest transactions Shares Bought/sold Change
Tiger Global Management 112.37K -8.42M -98.7%
TROW T. Rowe Price 20.1M +6.67M +49.7%
FMR 5.66M -4.78M -45.8%
CAS Investment Partners 6.73M +2.56M +61.6%
Marshall Wace 2.54M +2.51M +9956.3%
MS Morgan Stanley 5.2M -1.97M -27.4%
FPR Partners 1.79M +1.79M NEW
Vanguard 8.89M +1.59M +21.8%
Point72 Asset Management 1.51M +1.48M +5888.4%
GS Goldman Sachs 1.96M -1.45M -42.5%

Financial report summary

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Competition
Lithia MotorsTruecarKAR Auction ServicesCarGurusVroomCarLotzShift
Risks
  • The COVID-19 pandemic is adversely affecting, and could continue to adversely affect, our business, operating results, financial condition and prospects.
  • We have a history of losses and we may not achieve or maintain profitability in the future.
  • Our recent, rapid growth may not be indicative of our future growth and, if we continue to grow rapidly, we may not be able to manage our growth effectively.
  • Our failure to maintain a reputation of integrity and to otherwise maintain and enhance our customer service quality and brand could adversely affect our business, sales, and results of operations.
  • We expect to experience seasonal and other fluctuations in our quarterly operating results, which may not fully reflect the underlying performance of our business.
  • Through shared service and other agreements not negotiated at arm’s length, there were and are benefits to us from DriveTime’s expertise and economies of scale, and we continue to and may in the future utilize DriveTime and its affiliates for certain services and processes.
  • We participate in a highly competitive industry; pressure from existing and new companies may adversely affect our business and operating results.
  • Our business is sensitive to changes in the prices of new and used vehicles.
  • Our business is dependent upon access to desirable vehicle inventory. Obstacles to acquiring attractive inventory, whether because of supply, competition, or other factors, could have a material adverse effect on our business, sales, and results of operations.
  • Our business is dependent upon our ability to expeditiously sell inventory. Failure to expeditiously sell our inventory could have a material adverse effect on our business, sales, and results of operations.
  • Our access to structured finance, securitization, or derivative markets at competitive rates and in sufficient amounts may decline in the future; any material reduction could harm our business, results of operations, and financial condition.
  • We depend on the sale of automotive finance receivables for a substantial portion of our gross profit.
  • Our ability to sell automotive finance receivables is dependent on our ability to originate desirable finance receivables. If customers or other parties provide us incorrect or fraudulent data, we may offer credit terms that do not align with customers’ credit profiles, and our operating results may be harmed.
  • Our operating history and historical reliance on DriveTime systems and services make it difficult to evaluate our current business and future prospects.
  • The success of our business relies heavily on our marketing and branding efforts, and these efforts may not be successful.
  • We rely on internet search engines, vehicle listing sites, lead generators, automotive finance providers, and social networks to help drive traffic to our website and mobile application, and if we fail to appear prominently in the search results or fail to drive traffic through paid advertising, our traffic would decline and our business would be adversely affected.
  • We operate in several highly regulated industries and are subject to a wide range of federal, state, and local laws and regulations. Changes in these laws and regulations, or our failure to comply, could have a material adverse effect on our business, results of operations, and financial condition.
  • If we fail to comply with the Telephone Consumer Protection Act, we may face significant damages, which could harm our business, financial condition, results of operations, and cash flows.
  • Government regulation of the internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.
  • Our ability to grow our complementary product and service offerings may be limited, which could negatively impact our growth rate, revenues and financial performance.
  • If we do not adequately address our customers’ shift to mobile device technology, operating results could be harmed and our growth could be negatively affected.
  • Our business is subject to risks related to the larger automotive ecosystem, including consumer demand, global supply chain challenges, and other macroeconomic issues.
  • The current geographic concentration where we provide services creates an exposure to severe weather, local economies, regional downturns, or catastrophic occurrences that may materially adversely affect our financial condition and results of operations.
  • An inability to obtain affordable insurance on our inventory may materially adversely affect our financial condition and results of operations.
  • Our insurance coverage may not be enough to protect us from all claims.
  • We may require additional debt and equity capital to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances. If such capital is not available to us, our business, operating results, and financial condition may be harmed.
  • We rely on agreements with lenders to finance our vehicle inventory purchases. If we fail to maintain adequate relationships with such lenders, we may be unable to maintain sufficient inventory, which would adversely affect our business and results of operations.
  • Errors in our contracts with our customers could render them unenforceable or ineligible for sale. If we have already sold contracts with errors in them, we could be required to repurchase them.
  • We rely on our proprietary credit scoring model to forecast automotive finance receivable loss rates. If we are unable to effectively forecast loss rates, it may negatively impact our operating results.
  • Because we rely on internal and external logistics to transport our inventory throughout the United States, we are subject to business risks and costs associated with the transportation industry. Many of these risks and costs are out of our control, and any of them could have a material adverse effect on our business, financial condition, and results of operations.
  • We face a variety of risks associated with the construction, financing, and operation of our inspection and reconditioning centers and vending machines, any of which could adversely affect our financial condition and results of operations.
  • We may rely on agreements with lenders or institutional real estate investors to finance certain vending machines and inspection and reconditioning centers. If we fail to create or maintain adequate relationships with lenders or investors to finance such assets, we may be unable to construct and operate additional vending machines and inspection and reconditioning centers in the future, which would adversely affect our business and results of operations.
  • We collect, process, store, share, disclose, and use personal information and other data. Our actual or perceived failure to protect such information and data, mitigate data loss, and prevent a cybersecurity or other incident could damage our reputation and harm our business and operating results.
  • A significant disruption in service on our website or mobile application on any medium could damage our reputation and result in a loss of consumers, which could harm our business, brand, operating results, and financial condition.
  • Failure to adequately protect our intellectual property, technology, and confidential information could reduce our competitiveness and harm our business and operating results.
  • We may be subject to claims that our employees, consultants, or advisors have wrongfully used or disclosed trade secrets or other intellectual property or proprietary information of their current or former employers, or claims asserting ownership of what we regard as our own intellectual property.
  • We may become involved in lawsuits to defend ourselves against intellectual property disputes, which could be expensive and time consuming, and ultimately unsuccessful, and could result in the diversion of significant resources, and hinder our ability to commercialize our existing or future products.
  • Our platform utilizes open source software, and any failure to comply with the terms of these open source licenses could negatively affect our business.
  • Our business is sensitive to conditions affecting automotive manufacturers, including manufacturer recalls.
  • We rely on third-party technology to complete critical business functions. If that technology fails to adequately serve our needs and we cannot find alternatives, it may negatively impact our operating results.
  • We depend on key personnel to operate our business. If we are unable to retain, attract and integrate qualified personnel, our ability to develop and successfully grow our business could be harmed.
  • We have and may continue to acquire other companies or technologies, which could divert our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and harm our operating results.
  • We are, and may in the future be, subject to legal proceedings in the ordinary course of our business. If the outcomes of these proceedings are unfavorable to us, it could have a material adverse effect on our business, results of operations, and financial condition.
  • Our principal asset is our indirect interest in Carvana Group, and, accordingly, we depend on distributions from Carvana Group to pay our taxes and expenses, including payments under the 2025, 2027, 2028, and 2029 Notes and Tax Receivable Agreement. Carvana Group’s ability to make such distributions may be subject to various limitations and restrictions.
  • Conflicts of interest could arise between our stockholders and the LLC Unitholders, which may impede business decisions that could benefit our stockholders.
  • We are a "controlled company" within the meaning of the rules of the NYSE and, as a result, we qualify for exemptions from certain corporate governance requirements. Our stockholders do not have the same protections afforded to stockholders of companies that are subject to such requirements.
  • The Tax Receivable Agreement with the LLC Unitholders requires us to make cash payments to them in respect of certain tax benefits to which we may become entitled, and we expect that the payments we will be required to make will be substantial.
  • The amounts that we may be required to pay to the LLC Unitholders under the Tax Receivable Agreement may be accelerated in certain circumstances and may also significantly exceed the actual tax benefits that we ultimately realize.
  • Certain benefits from our organizational structure, including the Tax Receivable Agreement, will not benefit Class A common stockholders to the same extent as they will benefit the LLC Unitholders.
  • We will not be reimbursed for any payments made to the LLC Unitholders under the Tax Receivable Agreement in the event that any tax benefits are disallowed.
  • We may not be able to realize all or a portion of the tax benefits that are currently expected to result from future exchanges of LLC Units for our Class A common stock and from payments made under the Tax Receivable Agreement.
  • In certain circumstances, Carvana Group will be required to make distributions to us and the LLC Unitholders and the distributions may be substantial.
  • If we were deemed to be an investment company under the Investment Company Act of 1940, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations.
  • Our substantial indebtedness could adversely affect our financial flexibility and our competitive position and prevent us from fulfilling our obligations under our credit agreement.
  • Despite current indebtedness levels, we may incur substantially more indebtedness, which could further exacerbate the risks associated with our substantial indebtedness.
  • We may not be able to generate sufficient cash flow to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful, or may harm our business.
  • The phase-out of the London Interbank Offered Rate (LIBOR), or the replacement of LIBOR with a different reference rate, may adversely affect interest rates.
  • Changes in capital markets could adversely affect our business, sales, results of operations, and financial condition.
  • We may experience greater credit losses or prepayments in any interests we hold in automotive finance receivables than we anticipate.
  • Our securitizations may expose us to financing and other risks, and there can be no assurance that we will be able to access the securitization market in the future, which may require us to seek more costly financing.
  • Risk retention rules may increase our compliance costs, limit our liquidity and otherwise adversely affect our operating results.
  • The Garcia Parties control us and their interests may conflict with our or our stockholders’ interests in the future.
  • Our stock may be diluted by future issuances of additional Class A common stock or LLC Units in connection with our incentive plans, acquisitions or otherwise; future sales of such shares in the public market or the expectations that such sales may occur could lower our stock price.
  • Substantial blocks of our total outstanding shares may be sold into the market. If there are substantial sales of shares of our Class A common stock, the price of our Class A common stock could decline.
  • We do not intend to pay dividends on our Class A common stock for the foreseeable future.
  • Delaware law and certain provisions in our certificate of incorporation may prevent efforts by our stockholders to change the direction or management of our company.
  • With limited exceptions, the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or stockholders.
  • We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock.
  • The obligations associated with being a public company require significant resources and management attention, and we have and will continue to incur increased costs as a result of being a public company.
  • Our results of operations and financial condition are subject to management’s accounting judgments, estimates, and changes in accounting policies.
  • Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition.
  • Our Class A common stock price may be volatile or may decline regardless of our operating performance.
  • We are subject to SEC rules and regulations regarding our internal control over financial reporting. If we fail to remediate material weaknesses in our internal control over financial reporting or otherwise establish and maintain effective internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately report our financial results, or report them in a timely manner.
  • Negative research about our business published by analysts or journalists could cause our stock price to decline. A lack of regularly published research about our business could cause trading volume or our stock price to decline.
  • Short sellers of our stock may be manipulative and may drive down the market price of our common stock.
Management Discussion
  • (1) Includes $7, $16, $21 and $22, respectively, of wholesale revenue from related parties.
  • (2) Includes $50, $49, $98 and $91, respectively, of other sales and revenues from related parties.
  • (3) For the three and six months ended June 30, 2022, used vehicle gross profit includes $6 and $14, respectively, of share-based compensation expense related to the CEO Milestone Gift.

Content analysis

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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability
H.S. sophomore Avg
New words: added, approach, assembled, assistance, attrition, broader, complex, complexity, degree, feet, forma, marketplace, obsolescence, practicable, preliminary, produce, rendered, replacement, retrospective, small, square, staffed, straight, tangible, thereon, workforce
Removed: Bureau, discretionary, environment, global, guidance, statistical