Carvana shares spike again, up 200% year-to-date

Carvana (CVNA) closed 5% higher after rallying as much as 33% on Thursday. Shares of the used car platform had rallied a total of 111% over the previous five sessions.

Year-to-date the stock is up 200%.

Speculative growth names have taken off this year, especially those which are heavily shorted. Carvana's short interest hovers around 67% of the float, according to data from S3 Partners.

"CVNA’s price move has made it one of the most squeezable stocks in the U.S.," S3's Ihor Dusaniwsky told Yahoo Finance.

The company, once a pandemic darling, laid off workers last year in an effort to cut costs and preserve cash. The used car industry, which experienced record high inflation in 2022, has seen a slowdown in demand amid higher interest rates.

"Based on my fourth quarter expectations, I expect them [Carvana] to lose $2 billion in 2022 on the bottom line," said Douglas Arthur, managing director at Huber Research Partners, recently told Yahoo Finance.

"The equity market is largely shut off, and the bond market is largely shut off, so where is the money going to come from if they run out of money?," said the analyst, who has a Sell rating on the stock.

Despite this year's gains, Carvana is still trading about 95% lower than its closing high of $370.10 in August 2021.

"This economic environment remains uncertain, but we are focused squarely on the goal of driving the business to profitability," said Ernie Garcia, Carvana founder and CEO in the company's latest quarterly release last year.

Ines is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre

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