2 Reasons Investors Might Want to Steer Clear of Carvana Stock Right Now

Carvana (NYSE: CVNA) has become one of the more surprising turnaround stories in recent years. Two years ago, the company was on the brink of bankruptcy when a debt restructuring deal gave it new life. From that point, its financial performance began to improve and it has consistently reported a profit over the last few quarters.Nonetheless, despite its turnaround and predictions that its growth will continue, the challenges associated with holding this stock may outweigh the potential gains of owning it. Here's why investors should probably steer clear of Carvana stock.Carvana stood out in the marketplace by taking used car sales online. Instead of dealing with a salesperson, customers would choose from an online selection of inspected and reconditioned cars. From there, they could either pick up the car, sometimes from one of its famous "vending machines," or they can have it delivered. This approach gave Carvana an advantage over a competitor like CarMax, which has higher overhead costs associated with maintaining car lots and employing salespeople.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool