Core Viewpoint - Jim Chanos, a prominent short seller, has taken a position against Carvana (CVNA), citing concerns over the subprime auto lending market despite the company's significant stock performance over the past three years [1][2]. Company Performance - Carvana's stock has increased by 2,155% over the last three years, but it experienced an 11% drop recently due to Chanos' comments [1]. - In Q3, Carvana sold approximately 159,000 retail units, marking a 46% year-over-year increase and exceeding estimates by 6% [3]. - Sales in September rose by 54%, the fastest growth since late 2024, with Carvana achieving over 40% growth in car sales for five consecutive quarters [3]. Financial Metrics - The average selling price on Carvana's platform increased by 5% to $26,300, surpassing industry trends, while website traffic grew by 22% last month [4]. - Carvana reported record-breaking second-quarter results with retail units sold reaching 143,280, a 41% year-over-year increase, and revenue of $4.84 billion [5]. - The company achieved new records in adjusted EBITDA margin, GAAP operating income, and net income dollars [5]. Market Position - CEO Ernie Garcia stated that Carvana has become the fastest-growing and most profitable automotive retailer, capturing approximately 1.5% market share in the U.S. used car market [6]. - CFO Mark Jenkins highlighted the efficiency advantages of Carvana's vertically integrated platform, which supports annual sales exceeding one million units, positioning the company for substantial overhead leverage as growth continues [7].

Group 1 - The article does not provide any specific content related to a company or industry [1]

Core Insights - The Optimist Fund achieved a return of +9.1% in Q3 2025, significantly outperforming its benchmark [5] - The fund's year-to-date return stands at 44.5%, compared to the benchmark's 11.1% [5] - The fund anticipates continued growth opportunities over the next three and a half years, similar to recent performance [4] Fund Performance - The fund's performance over various periods shows significant volatility, with a notable recovery from a -51.4% return in 2022 to 82.9% in 2023 [5] - Compound returns as of September 30, 2025, indicate strong performance across 1-year (61.2%), 2-year (65.6%), and 3-year (61.9%) periods [5] Top Contributors - **Wayfair**: Revenue increased by approximately 5% year-over-year to $3.27 billion, marking its fastest growth since Q1 2021. Adjusted EBITDA reached $205 million, indicating a margin above 6% for the first time since Q2 2021 [7][8][9] - **ThredUp**: Revenue rose 16% year-over-year to $77.7 million, with adjusted EBITDA increasing by around 100%. Active buyers grew by 17% to 1.47 million [10][11][12] - **Carvana**: Retail units sold increased by 41% year-over-year to 143,280 vehicles, with total revenue rising 42% to $4.84 billion. Adjusted EBITDA reached $601 million, reflecting a 12.4% margin [13][14][15] Top Detractors - **Monday.com**: Despite a 27% increase in revenue, the company reduced its second-half 2025 revenue guidance due to weaker performance marketing trends, causing investor concerns [20][21][22] - **Fiverr**: Results were below expectations, leading to a reduction in position size despite maintaining an attractive risk/reward profile [25][26] Portfolio Composition - The top 10 holdings comprise approximately 85% of the portfolio, including ThredUp, Monday.com, Carvana, Uber, Wayfair, DoorDash, First Advantage, Fiverr, Latham Group, and Medpace [27] Notable Changes - The fund exited positions in HelloFresh and Revolve due to management changes and reduced confidence in growth prospects, reallocating capital to more promising opportunities [29][30] Company Insights - **Medpace**: A leading contract research organization (CRO) focused on small and mid-sized biotech companies, showing strong revenue growth of 14.2% year-over-year to $603.3 million [31][18][35] - The company has a disciplined capital allocation strategy, with a history of share repurchases during market downturns, enhancing long-term growth potential [34][35]

Core Viewpoint - Carvana Co. is facing significant challenges due to its controversial financial history, governance issues, and increasing regulatory scrutiny, which could lead to substantial downside risks for investors [2][4]. Financial Performance - As of October 9th, Carvana's share price was $360.03, with trailing and forward P/E ratios of 98.19 and 60.61 respectively [1]. - The company has over $4.5 billion in debt maturing over the next decade, indicating potential financial strain [3]. Governance and Management - The Garcia family's history of financial misconduct raises concerns about the governance of Carvana, particularly with the audit committee chairman having longstanding ties to the Garcias [3][4]. - The aggressive financial strategies employed by the company, including subprime auto lending and complex related-party transactions, have been criticized for inflating reported sales and earnings [2][3]. Regulatory Environment - Carvana is under increasing regulatory scrutiny, with the SEC issuing a subpoena and investors pursuing lawsuits related to alleged pump-and-dump schemes [4]. - The combination of aggressive financial engineering and governance risks suggests that Carvana is vulnerable to market and regulatory pressures [4]. Market Position and Strategy - Despite the challenges, Carvana's vertically integrated e-commerce platform and operational efficiencies have been highlighted as strengths, contributing to a 12.4% appreciation in stock price since previous bullish coverage [5]. - The company's reliance on the volatile subprime lending market continues to underpin its profitability, but this also exposes it to significant risks [4].

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...

Core Viewpoint - Jim Chanos, president and founder of Chanos & Co., expresses concerns regarding a Carvana affiliate that services the company's auto loans during an interview on "Bloomberg Markets" [1] Group 1 - The involvement of a Carvana affiliate in servicing auto loans raises potential issues for the company [1]

Core Insights - Carvana Co. (NYSE:CVNA) is recognized as one of the best revenue growth stocks to invest in, with Wall Street showing a bullish sentiment towards the company [1] - Analysts from BTIG and Morgan Stanley have both reiterated a Buy rating on Carvana, setting a price target of $450 [1][3] Financial Performance - The company's September ABS performance data indicates signs of recovery, with improvements in cumulative net loss development and a decline in 30 and 60-day delinquencies [2] Competitive Advantages - Carvana offers a superior customer experience, stronger brand image, and better customer trust compared to its competitor CarMax [4] - The company excels in user-friendly website and app navigation, along with better pricing, which are seen as significant competitive advantages [4] - Carvana's innovative business model is expected to position it for substantial growth, with an anticipated market share of 12% by 2040 [4] Business Model - Carvana operates an online platform that facilitates the buying and selling of used cars, allowing users to research vehicles, obtain financing, and arrange for delivery or pickup [5]

Online car retailer Carvana Co (NYSE:CVNA) is trading 1.5% higher at $338.61 at last check, adding to its already 66% year-to-date gain and attempting to recover some of its 10% quarterly loss. Since touching a record high of $413.35 in July, the shares have struggled, though $320 has captured several pullbacks in recent months. Another key trendline is also emerging that should have bulls ready to buy the dip.CVNA is testing its historically bullish, 126-day trendline. Per Schaeffer's Senior Quantitative A ...

Core Viewpoint - Morgan Stanley identifies Pinterest as a stock pick due to strong earnings revisions, indicating a favorable environment for stock selection amid rising stock-specific risks [1][2]. Group 1: Stock Selection Environment - Stock-specific risks have increased recently, creating a historically opportunistic environment for stock picking [1]. - Analysts' opinions on company earnings prospects are becoming more varied, contributing to a dispersion of earnings revision breadth [2]. Group 2: Earnings Revisions and Stock Performance - Research indicates that positive earnings revisions can lead to stock gains, with companies that exceed earnings expectations consistently outperforming those that fall short [3]. - Morgan Stanley's stock screen focuses on companies with strong earnings revision momentum, highlighting Pinterest, Reddit, Take-Two Interactive, Burlington Stores, and Carvana as top picks [4]. Group 3: Sector Updates - In the restaurant sector, pricing is restrained while promotional activity is high; the gaming and leisure sector, particularly cruises, is experiencing healthy demand [6]. - Analysts expect improvements in freight-related companies over the next six months [6]. - The technology sector shows continued strength in AI, with challenges in traditional storage and server capacities; within internet companies, agentic AI is gaining traction in e-commerce [6]. - In consumer finance, there is ongoing degradation at the low end of the market, but this trend is not spreading [6].

Core Insights - Carvana Co. shows signs of stabilizing credit performance in the subprime auto market, with slower net loss growth and declining delinquencies, providing cautious reassurance to investors [1][3] Asset-Backed Securities Performance - September data for Carvana's 2025-N1 subprime ABS indicates a moderation in cumulative net loss (CNL) growth, which rose by 44 basis points to 2.29%, a slowdown from the 57-basis-point increase in August [2][3] - The CNL increase is favorable compared to the 85-basis-point average seen in 2022-2023 subprime ABS issuances [4] Delinquency Trends - Positive trends in delinquencies were observed, with 30-day delinquencies decreasing by 44 basis points to 6.64% and 60-day delinquencies declining by three basis points to 2.26% [5] - 90-day delinquencies rose modestly by 13 basis points to 0.95%, consistent with earlier ABS vintages [5] Broader Auto Market Context - Despite investor concerns regarding credit quality, broader trends in the auto portfolio among large-cap banks remain stable, with year-over-year declines in delinquencies and charge-offs [7] Competitive Advantage - Carvana's vertically integrated model supports strong unit economics and industry-leading EBITDA margins, despite holding a modest 1% market share in U.S. used car retail [8] - The company is expected to leverage cost advantages as tariffs impact new car prices, potentially expanding market share and profits [8] Financial Projections - Revenue is projected to increase from $13.67 billion in fiscal 2024 to $18.97 billion in fiscal 2025 and $24.03 billion in fiscal 2026 [9] - Adjusted EBITDA is expected to grow from $1.38 billion in fiscal 2024 to $2.19 billion in fiscal 2025 and $2.92 billion in fiscal 2026, resulting in EV/EBITDA multiples of 58.9x, 37.0x, and 27.8x respectively [9] Company Overview - Carvana, founded in 2012 and based in Tempe, Arizona, is the largest pure-play online used car retailer in the U.S., with a combined retail and wholesale volume of over 1.3 million vehicles in 2024 [10]