What Happened?
Shares of online used car dealer Carvana (NYSE: CVNA) jumped 6.3% in the pre-market session after Morgan Stanley analysts upgraded the stock's rating from Neutral to Buy. The analysts noted that the stock's recent pullback represented a "unique opportunity to build a position."
After the initial pop the shares cooled down to $223.63, up 4.8% from previous close.
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What The Market Is Telling Us
Carvana’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 9.6% on the news that Piper Sandler analysts upgraded the stock from Neutral to Buy, suggesting that the company's reduced valuation presented a buying opportunity. The analysts added "We would use the recent sell-off to accumulate CVNA shares."
Carvana is up 12.1% since the beginning of the year, but at $223.63 per share, it is still trading 21.6% below its 52-week high of $285.33 from February 2025. Investors who bought $1,000 worth of Carvana’s shares 5 years ago would now be looking at an investment worth $3,579.
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