Carvana shares jump 40% on debt deal and a strong Q2

July 20, 2023 02:12 AM AEST | By Invezz

Carvana shares jump 40% on debt deal and a strong Q2 — Image source: Invezz

Carvana also plans on raising new capital

On Wednesday, the used car retailer said it has signed an agreement with noteholders that will trim its outstanding debt by more than $1.2 billion. Its press release reads:

Agreement to eliminate more than 83% of Carvana’s 2025 and 2027 unsecured note maturities and lower required cash interest expense by over $430 million per year for the next two years.

Carvana also plans on selling shares to raise up to $1.0 billion. The stock is shining this morning also because the Tempe-headquartered firm said its second-quarter was the best it has ever reported in terms of adjusted EBITDA.

Carvana shares are now trading at 12 times the price at which they started the year.

Carvana stock up on a strong second-quarter

Carvana reported 55 cents a share of net loss on $2.97 billion in revenue for its recently concluded quarter. In comparison, experts were at $1.20 per share and $2.6 billion revenue.

The used-car retailer said its profit per unit hit a record $6,520 in Q2. Reacting to the company’s updates today, Michael Baker – D.A. Davidson analyst said:

We applaud CVNA’s ability to improve their profitability and restructure their balance sheet at a time when unit demand remains soft.

Carvana reported $155 million of adjusted EBITDA for the second quarter and expects to remain positive on that metric in the current quarter as well.

The New York listed firm expects retail units sold to remain roughly unchanged sequentially at about 76,530. Adjusted gross profit per unit, it added, will come in above $5,000 in Q3. Wall Street still rates Carvana shares at “hold” only.

The post Carvana shares jump 40% on debt deal and a strong Q2 appeared first on Invezz.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.