2 Risky Stocks That Could Plunge

Group 1: Carvana - Carvana has shown significant recovery after a debt restructuring in 2023, increasing total retail units sold and improving per-vehicle gross profit while reducing per-vehicle expenses [3][4] - The company aims to sell 3 million retail vehicles annually within 5 to 10 years, requiring a sixfold increase in its current retail unit annual run rate [4] - Carvana's current stock valuation is around 110 times earnings, which are inflated by gains on certain warrants, necessitating substantial growth in unit sales and profit margins to justify this valuation [5][6] - The used car market is cyclical and sensitive to economic conditions, raising concerns about Carvana's aggressive financing strategies, which could lead to vulnerabilities in an economic downturn [6][7] Group 2: IonQ - IonQ operates in the speculative quantum computing sector, which is seen as a potential future technology but faces significant competition from established players like IBM and Alphabet [8][9] - Commercially viable quantum computing systems are estimated to be four to five years away, with IonQ needing to survive until the technology matures [9] - IonQ recently announced a $1 billion equity offering, providing financial resources despite reporting a free cash flow loss of nearly $130 million in 2024 and a net loss of $332 million [10] - With only $43 million in revenue last year and a market capitalization exceeding $12 billion, IonQ represents a high-risk investment in the quantum computing space [11]