Why Carvana Stock Crashed Today
Shares of used-car e-commerce company Carvana (NYSE: CVNA) crashed on Thursday morning. The broader market was down sharply and that was certainly impacting Carvana stock. However, its rival CarMax (NYSE: KMX) reported its quarterly results and offered up some commentary that could be bad news for Carvana, too. As of 12:01 p.m. ET, Carvana stock was down 18.5%.
First, let's recognize that Carvana is a volatile stock to begin with. Volatility can be measured with a metric called beta. A beta of 1 indicates that a particular stock's movements are correlated with and match those of the market as a whole. However, Carvana's beta is 2.6, according to Yahoo Finance, meaning shareholders can expect larger moves up and down on any given day.
On Thursday, Carvana stock was also reacting to the news from CarMax. In its fiscal 2023 second quarter, which ended Aug. 31, CarMax sold 376,616 vehicles, down 10.3% year over year. It seems higher interest rates are cutting into consumer demand for vehicles. That's bad news for any used-car dealer, including Carvana.
Source Fool.com
