Innovative auto dealer Carvana is back from the brink, at least for now. Shares of the company known for its auto "vending machines" plunged from a high above 370 in August 2021 to an intraday low 3.62 a share on Dec. 28. Since December its stock has more than tripled to above 12. And on Wednesday the Relative Strength (RS) Rating for Carvana stock soared to 88, up from 69 the day before.
Perhaps one reason for Carvana stock's fast rise recently, and the bullishness of analysts, is the ads the company has been running touting how easy it is for car owners to sell their cars to Carvana, which picks the car up and hands a check to the seller on the spot. That's enabled it to replenish its depleted supply of used cars to sell. There are other indications that the company could be getting back on track.
Carvana Stock A Favorite On Wall Street, For Now
Although most of its ratings are understandably terrible because of its near debacle, it boasts an A- Accumulation/Distribution Rating on an A+ to E scale. The A- rating means that institutional investors such as mutual funds and ETFs are piling into Carvana stock, a bullish sign. It remains to be seen though whether the strength the Street sees there now will continue to grow.
The upgraded 88 RS Rating shows that Carvana stock has outperformed 88% of all stocks for price performance over the past year. Although it's too early to declare a definitive turnaround, it should be noted that market research shows that the market's biggest winners typically have an RS Rating north of 80 in the early stages of their moves.
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Among its other key ratings Carvana has a dismal 21 Earnings Per Share Rating, out of 99, after losing money every quarter since June 2021, according to MarketSmith. On May 4 the company reported it lost $1.51 per share in the first quarter. That was improved from a $2.89 per share loss the same quarter a year earlier, and a lot better than the $7.61 per share loss in Q4 2022. First quarter revenue fell 25% year over year to $2.61 billion. It also has a middling 50 Composite Rating.
No Definite Base Formed Yet
Carvana stock is not currently near a potential buying area. See if the stock goes on to build a chart pattern like a three-weeks-tight or cup base that could kick off a new price move.
Carvana stock earns the No. 16 rank among its peers in the Retail/Wholesale-Auto Parts industry group. ACV Auctions and Group 1 Automotive are among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's proprietary RS Rating identifies market leadership by using a 1 (worst) to 99 (best) score that indicates how a stock's price performance over the trailing 52 weeks matches up against that of all other stocks.
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