Carvana's Debt Problems: What Investors Need to Know

Carvana's Debt and Profitability

Impressively, Carvana turned a profit in 2023 and 1Q 2024. However, the company's debt remains a significant concern with a leverage ratio over 25 times.

Key Takeaway:

• Debt Negotiation: Carvana's debt renegotiation saved it from bankruptcy but doesn't indicate financial strength.
• Interest Expenses: High interest costs continue to erode operational profits, requiring close monitoring.
• Profitability Concerns: Despite recent earnings, ongoing challenges raise doubts about sustained profitability without one-time gains.