Price Forecast:

Bullish Case: Improved profitability trends, driven by successful restructuring and operational efficiencies, pair with rising consumer demand in the used car market. Positive analyst sentiment and innovative sales strategies further consolidate the bullish outlook for CVNA.

Bearish Case: High debt levels and ongoing volatility in the used car market could strain Carvana's financial stability. Rising interest rates and competition might pressure sales volume, leading to possible downturns in stock performance.

Potential Outcomes:

• Continued profitability could boost share price (60% chance).
• Debt issues and macroeconomic factors might hinder growth (30% chance).
• Market corrections due to overvaluation and bearish sentiment (10% chance).

Trading Oracle: Consider initiating a bullish debit spread by buying the CVNA 12/27/2024 260.00 C and selling the 265.00 C. This setup allows capitalizing on the anticipated rise in volatility post-January and aligns with a favorable risk-reward profile, given the potential for significant upward price movement. Expect high probability with a structured edge.

December 15, 2024