Carvana Inc. (NYSE:CVNA) shares are trading lower Friday following a wave of bearish options activity and a significant insider sale.
What To Know: Despite recent strong financial performance and ongoing brand marketing efforts, large investors are showing caution. Data from Benzinga indicates a notable uptick in bearish sentiment among options traders, with 51% of 29 large trades identified as bearish, compared to just 34% bullish. Some of the largest trades include put and call options targeting strike prices as high as $450 and as low as $160, signaling a wide range of expectations and uncertainty about the stock’s future trajectory.
Further pressure came after Chief Brand Officer Ryan Keeton sold more than $3.8 million worth of shares earlier this week, as disclosed in a recent SEC filing. While insider sales aren't always negative signals, they can raise investor concern, especially when paired with bearish options trends.
Carvana's fundamentals remain a mixed bag. Revenue has grown over 38% year-over-year, and the company maintains a gross margin of nearly 22%. However, its EPS remains below industry averages, and its debt-to-equity ratio is high at 4.02, suggesting reliance on borrowing. The stock trades at elevated valuation multiples, including a P/E ratio of 118.58 and an EV/EBITDA of 30.28, which may be contributing to market hesitation.
In the background, Carvana launched a national ad campaign featuring actor Jon Hamm to highlight the ease of selling cars through its platform. While the campaign aims to boost customer engagement, it hasn't yet offset the impact of insider selling and bearish institutional sentiment in the market.
CVNA Price Action: Carvana shares were down 5.88% at $300.19 at the time of writing, according to Benzinga Pro.
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