Carvana Co. Faces Pressures Amid Rising Auto Delinquencies
Carvana Co. (CVNA), an online retailer of used vehicles, experienced a 1.5 % decline in its share price on 2025‑11‑20, closing at $313.25 per share. The drop follows a series of reports highlighting challenges in the company’s auto‑financing arm and a broader industry trend of increasing loan delinquencies.
Rising Delinquency Concerns
Investors.com reported that Carvana’s stock has gained relative strength, receiving an upgrade to its IBD Relative Strength Rating. However, this positive sentiment is tempered by a warning from invezz.com that the company may be at risk as auto delinquencies rise. The source cites a recent surge in late payments among Carvana’s financing customers, which could erode the firm’s revenue streams and affect its profitability.
Financing Issues Highlighted by Analysts
Finance.yahoo.com published an opinion piece titled “Buyer Beware: Carvana Is Driving an Auto Lending Crisis.” The article argues that the company’s aggressive growth strategy—characterized by high volumes of vehicle purchases and rapid expansion of its financing portfolio—has exposed it to heightened credit risk. The piece notes that Carvana’s price‑earnings ratio of 74.43 remains significantly above the sector average, suggesting that investors may be pricing in future earnings pressure.
Rating and Outlook
Needham, a long‑term analyst for Carvana, maintained a “Buy” rating on 2025‑11‑18 following the company’s Q3 results. The firm cited strong inventory management and a growing customer base as mitigating factors. Despite this support, the rating comes with a caveat: the need for tighter credit controls and a clearer strategy for managing delinquent loans.
Market Context
Carvana’s shares traded within a 52‑week range of $148.25 to $413.33, reflecting high volatility. The company’s market cap stands at approximately $67.9 billion, with a close price of $313.25 on the most recent trading day. The consumer discretionary sector, in which Carvana operates, has seen mixed performance, as online retail platforms face increasing competition and regulatory scrutiny over financing practices.
Summary
Carvana Co. continues to grow its online used‑car marketplace, yet the rising trend in auto delinquencies presents a notable risk to its financial health. While analysts have upgraded its relative strength and maintained a buy rating, the company’s high price‑earnings ratio and the potential impact of loan defaults warrant close monitoring by investors.
