The Carvana (NYSE: CVNA) stock price has a slow rebound with investors focused on the quarterly earnings reports ahead. The shares are trading at $101.77, slightly above the lowest this week of $94. It’s also 72% below its highest in 2021, thus a $17 billion market cap.
Carvana’s Growth Worries persist.
Carvana is a massive company in the automobile industry running a website and mobile apps for buying used cars. After purchasing the vehicles, they deliver them to homes or offices or keep them in their 36 vending machines.
Carvana’s stock price hiked during the Covid-19 pandemic with lots of growth. Concurrently, semiconductors decreased, causing challenges for the auto industry. Therefore, many people bought Carvana vehicles instead with their lockdown savings and excitement.
Recently, there have been worries that those savings and the excitement are over; thus, the industry is unstable. The sell-offs showcase how others who did well during the pandemic are performing. Such firms include Stitch Fix, Etsy, and Warby Parker.
Recently, RBC analysts downgraded Carvana, sighting growth challenges against capacity. Others trust that Carvana performed well in its industry longer, and besides, many are now used to purchasing vehicles online.
The next significant catalyst for the Carvana share price is the Thursday earnings ahead. Analysts predict a drop in total revenue to $3.3 billion from last quarter’s $3.75 billion. They also see an increase in loss per share to $1.53 though Carvana is famously known for beating such predictions on revenue.
Carvana stock price forecast
The daily chart shows that the CVNA share price is trading at a significant support level. The current price is close to where it was on March 9th. The stock remains slightly below the 25-day and 50-day moving averages. It has also moved below the descending trendline shown in black.
Hence, the stocks’ outlook is neutral at the moment. A move below the critical support will compromise the double-bottom created. Therefore, it will mean there are more sellers in the market. On the other hand, a move above the resistance at $120 will mean more buyers in the market.