How THIS “Zombie Company” Came Back from the Dead And Leaped 2,640%

If you think you've had a rough week at work, just chat with Ernie Garcia. The guy knows tough times. Not long ago, his company Carvana was the laughingstock of the market, branded a "zombie company" by the straight-shooters at New Constructs. 

Since going public in 2017, the online used car retailer hadn't managed to turn a single dollar of positive cash flow. With stocks in freefall and investor sentiment going down the toilet, the future looked bleak in 2022, even if you were looking through rose colored glasses. 

At one point, the company’s stock price plummeted roughly 99% to less than $5 per share and they owed $5 billion in debt. Carvana had "bankruptcy" practically tattooed on its forehead, even if they refused to say the word.

But then, like Tom Brady in Super Bowl 51 down 28-3 to the Falcons at the end of the 3rd quarter, Carvana started its epic comeback. Over 18 months, the company slashed its workforce by over 4,000 and cut $1.1 billion in annual expenses. 

They even introduced “Carli,” a money-saving AI software that took over the task of vehicle reconditioning. Carli efficiently managed everything from buffing out scratches to detailing interiors. This innovation ensured that every car was ready for sale faster and more cost-effectively.

Fast forward to today, and Carvana is making sure everyone knows they had "another landmark quarter." The stock has blasted off, rocketing up 180% in 2024, now chilling at $137. The latest quarter’s results are nothing short of spectacular considering not long ago the company was the prime target of twitter meme pages. 

Carvana moved 101,440 vehicles—a 33% leap from last year. They posted a net income of $48 million, or 14 cents a share, obliterating analysts' gloomy predictions of a 7-cent loss. Revenue shot up to $3.41 billion, beating Wall Street’s $3.24 billion forecast. Carvana didn't just prove the analysts wrong—they gave them a big, friendly middle finger from inside their car vending machine.

Analysts, known for switching up faster than Kevin Durant changes teams, have been scrambling to up their price targets. Carvana’s strategic moves and relentless growth drive are paying off big time. Garcia even bragged they’re the "fastest growing and most profitable public automotive retailer." I don’t know if I’d go that far Ernie, but I’m not gonna rain on your victory lap parade.

Stock.News does not have positions in companies mentioned.