What Has Carvana (CVNA) Stock Done for Investors?

Core Viewpoint - Carvana is a leading online used car retailer that is seen as both a disruptive innovator and a company with a potentially unsustainable business model, heavily reliant on favorable credit markets [1] Company Performance - Over the past five years, Carvana shares have gained 79%, underperforming the S&P 500's total return of 101% during the same period [2] - In the last three years, Carvana's stock has surged 8,420%, and it has increased by 80% over the past 12 months, significantly outperforming the broader market [3] Financial Health - Carvana's stock hit a low of $3.72 in late December 2022, amid concerns of potential bankruptcy due to rising debt following a $2.2 billion acquisition [4] - In Q3, unit volume and revenue increased by 44% and 55% year-over-year, respectively, while long-term debt decreased to $5.5 billion from a peak of $7.5 billion in 2022 [5] Market Opportunity - The domestic used car market saw 36 million transactions in 2023, presenting a significant opportunity for Carvana to expand its scale and increase sales and profits [8] - Carvana's shares are currently trading at a price-to-sales ratio of 3.5, close to its highest multiple reached during the 2021 bull market, indicating a potentially expensive valuation [8]