Online car dealer Carvana’s shares are careening toward an all-time low as investors grow more concerned about the continuing decline in used-vehicle prices.
The price of the company’s stock fell as much as 12% to $7.06, on pace to close at a record low.
Carvana, which was once touted as a disruptor in the used-car dealer industry for its online sales, has seen recession-wary investors flee this year from risky and expensive growth stocks.
Carvana’s shares have plummeted 97% so far this year as potential buyers grapple with higher interest rates and stubborn inflation.
“As used car prices fall, we believe that Carvana will struggle to make a profit on vehicles previously purchased at high prices,” Argus Research analyst Taylor Conrad wrote in a Monday note, downgrading the rating on the stock to sell from hold and noting the company is highly leveraged. “We believe that the shares are overvalued.”
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