Carvana's Stock Is Down 90%. Here's Why It's a Buy
If I found a used BMW on sale at Carvana (NYSE: CVNA), and the price had dropped from $37,000 to $2,500, I'd be really interested. I'd rather pay $2,500 for a BMW than $37,000. But that price drop is so dramatic, I'd be really suspicious, too. "What's wrong with it?" I would want to know. "How come nobody is buying this BMW for $2,500?"
Carvana's stock has undergone a similar dramatic price drop. A year ago, 100 shares of Carvana stock would have cost you $37,000. Now it's priced at $2,500. That's a decline of over 90%.
Twenty years ago, Amazon (NASDAQ: AMZN) stock had a similar decline. It, too, saw a fall steeper than 90%. People who bought the stock then made out like bandits. I happen to think that Carvana and Amazon have very similar business models.
Source Fool.com
