Price Forecast:

Bullish Case: Carvana could lead to a strong price rebound with recent profitability trends, enhanced service offerings, and a bullish shift in market sentiment driving demand for used cars, impacting share value positively over the next quarter.

Bearish Case: Potential debt pressures and economic headwinds may outweigh operational improvements, dissuading investors and leading to a downturn in CVNA stock despite its recent performance improvements.

Potential Outcomes:

1. 40%: Continued profitability leads to price appreciation.

2. 30%: Major economic downturn exacerbates debt issues, pulling share prices down.

3. 20%: Successful expansion into new markets enhances revenue.

4. 10%: Regulatory issues hinder growth potential, influencing stock negatively.

Trading Oracle: Consider establishing a bullish credit spread by selling $250 strike puts and buying $240 puts, anticipating a continued positive trend with a potential return of 15% (120% annualized). Leverage high implied volatility to capitalize on premium decay. Very manageable risk-reward profile here!

November 12, 2024