Optimist Fund on Carvana Co.
Thesis
Carvana's retail units sold continued to grow at approximately 40% year over year. A visit to the Cleveland reconditioning center reinforced the fund's positive view of the quality, ambition and energy of leadership below the C-suite. The fund also believes the operational efficiency opportunity remains far from exhausted and that meaningful additional margin can still be captured. With the shares down roughly 20% for the year and trading at about 13x the fund's estimate of 2027 EBITDA despite approximately 40% organic growth, Optimist considers the valuation a bargain and has been adding to the position.
“there is still meaningful margin left to capture in operations.”