Joe Raedle
Carvana (NYSE: CVNAin the US by Cazoo (NYSE: CZOO) in the UK gave a pessimistic view on online car sales on Monday.
Not long after the Welsh National Rugby team he supported suffered a shocking loss GeorgiaCazoo (CHOO) stock fell to record lows in Monday’s trading. Shares of London-based online car dealers fell 10.58% Monday to $0.295, less than a cent above the all-time nadir. Sales have fallen nearly 97% over the past year, following in line with its American counterpart Carvana (CVNA) –14.27%.
The drop in used car prices has hit both companies hard in 2022, prompting Carvana to reduce its volume and Cazoo to chase other businesses and abandon expansion projects.
Both companies have also expressed concern about cash burn, with Carvana getting a downgrade from Moody’s on Monday when the agency changed its outlook to negative and reaffirmed its Caa1 corporate credit rating and SGL-4 grade liquidity rating.
“The change in outlook from negative to stable reflects Carvana’s lack of profitability and free cash flow that did not meet Moody’s expectations,” the change read. “It also indicates that Carvana’s profitability and free cash flow are expected to remain weak as gross profit per vehicle and inventory remain under pressure.”
Amid the rising risks, many experts have begun to express their feelings for the Arizona e-commerce company to survive in the next one or two years.
Read more about the Argus downgrade of Carvana on Monday.
