This company is booming…
This automobile retailer just got upgraded.
It’s common knowledge that the pandemic bolstered the e-commerce sector. And it makes sense due to the lockdown measures that swept the nation. But there’s one company breaking records recently, and it has surprised many.
That company? Carvana. Yes, the online used-car retailer. After a dismal first-quarter earnings report, momentum returned to the retailer. And that momentum is continuing, as now the company expects record revenue and retail sales. And it’s all due to a strong rebound in demand for vehicles in the United States, following the easing of lockdown restrictions.
And this uptick has been a trend across the auto industry. Since hitting a bottom in April, sales in North America have continued to recover from the COVID-19 pandemic. This strong rebound has led to significant automakers scrambling to keep up with demand – a good sign for the industry.
Where’s the money?
Carvana has averaged about $1.1 billion in sales over the last four quarters and sold just over 55,000 retail units in the second quarter of this year. And now, they’re set to report earnings on November 4. The company said it expects to be breakeven on earnings before interest and taxes. But that’s not what is catching my attention.
Goldman Sachs officially upgraded the stock up to a buy. And the firm expects retail unit sales to hit 48% year over year in the third quarter, which is up 25% from the second quarter. On top of this, Sachs also raised the price target on the stock to $205, up from $178.
And here’s what I have to say about this optimism…
How can I get some?
Carvana has seen record car sales again, and gain, and then again. And while it may have caught a few off guard, I wasn’t one of them. And the reason why is because logically, it makes sense.
With COVID, people who usually use public transportation are now avoiding it due to the virus’s spread. That means those who initially didn’t rely on a personal vehicle now do. And to make things better – Carvana is an entirely online experience – meaning the consumer can select their new car from the comfort of their home.
A double win in pandemic times.
With that said, I believe that we’ll continue to see a strong stream of consumers coming to Carvana for their automobile needs. And that’s why I think the stock is a buy on any pullback. But once we see a vaccine come to market, I believe it will be time to pull the record and take your profits.
In the spotlight: The bankruptcies continue…
The pandemic recession has forced an unthinkable amount of large businesses to file bankruptcy over the last few months. And the worst part? There’s countless more on the way. Hertz, Brook Brothers, California Pizza Kitchen, and Chuck E. Cheese are just a few of the well-known names closing their doors as we move into the fall months.
Despite constant aid from the Federal Reserve and Congress, large companies who have filed for bankruptcy have spiked 244% in July and August when comparing it to 2019’s numbers. Some companies, like 118-year-old JCPenney (JCP), have found buyers to save the business and rebuild post-bankruptcy. Others, like department stores Lord & Taylor and Century 21, are shutting down completely.
And I think it’s beyond important that you pay attention to this wave of bankruptcies hitting the economy. Because while Wall Street has not only recovered but exploded over the last few months, the pandemic is dealing with some massive blows to the U.S. economy. And that’s why I continue to remain vigilant with my trading criteria, and that’s precisely why you should too.
So, with that said, plan your trade and trade your plan. You’ll be glad you did in the long run.
There’s Still Opportunity Out There…
Between the number of bankruptcies forced by the coronavirus recession and the unlikely success stories emerging during the same time, most individual investors don’t know what to make of today’s market.
But if you know where to look, there are still plenty of chances for trading success.
In fact, just this morning, my Project 303 readers could’ve cashed in on two profit opportunities…
But the best part is that these positions returned these two wins in about 24 hours!
Click here now to learn what we used to pinpoint these winners, and how you can do the same.