Carvana: This has consequences!

The bears have Carvana firmly in their grip

The current price of Carvana of 7.97 USD, with -84.72 percent distance from the GD200 (52.16 USD), is a “sell” signal from the point of view of the chart-technical evaluation. In contrast, the GD50, which quantifies the average price development from 50 days, shows a price of 16.69 USD. This means that the share price has a “Sell” signal, as the gap is -52.25 percent. The bottom line is that Carvana’s share price is rated as a “Sell” if the average of 50 and 200 days is used as a basis.

How to evaluate the share price performance?

The stock has returned -89.18 percent over the past year. Compared to stocks in the same sector (“Consumer Staples”), this puts Carvana 129.46 percent below the average (40.27 percent). The median annual return for securities from the same sector “specialty retail” is 72.34 percent. Carvana is currently 161.52 percent below this figure. Due to the underperformance, we rate the stock an overall “Sell” at this level.

Carvana fails to convince investors

An evaluation of the rate of change in sentiment and the intensity of discussion reveals the following pictureDuring the past month, investor sentiment became increasingly gloomy. Therefore, we rate this item as Sell. Let’s look at the intensity of discussions from last month. This provides information on whether a stock tends to receive a lot or little attention. The company was discussed less than before and moved out of the focus of investors. This leads to a “sell” rating. As a result, Carvana’s stock is given a “sell” rating.

How does the RSI represent the situation?

With the help of the Relative Strength Index (RSI), an indicator from technical analysis, a statement can be made as to whether a security is “overbought” or “oversold”. For this purpose, the upward and downward movements of an underlying security over time are put into relation. Let’s take a look at the RSI of the last 7 days for the Carvana share. The value is currently 71.3. Accordingly, the security is overbought, we therefore assign a “Sell” rating. The RSI of the last 25 trading days is less volatile than the RSI7 and complements our analysis with a longer-term view. Contrary to the RSI7, Carvana is neither overbought nor oversold here. For the RSI25, the security is therefore rated as “Hold”. Overall, the analysis of the RSIs on Carvana thus provides a “Sell” rating.

Current shareholder sentiment

The discussions surrounding Carvana on social media platforms provide a clear signal on the assessments and sentiments surrounding the stock. Currently, overall negative opinions are piling up in the comments and opinions in the past two weeks. In contrast, predominantly positive topics around the value were addressed in the past days. Thus, our editorial team comes to the conclusion that the company should be classified as “Hold”. In summary, the editorial team is thus of the opinion that the share of Carvana is appropriately valued in terms of investor sentiment with “Hold”.