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Carvana stock has decreased 97% in value so far in 2022

Carvana’s stock has been downgraded to perform from outperform on Tuesday after analysts said that near-term challenges for the used-car retailer were “unlikely to abate.”

Oppenheimer analyst Brian Nagel wrote, “significant nearer-term operational and financial risks for Carvana have emerged and are likely to cloud the CVNA investment story for the foreseeable future.” The analyst said Carvana will likely need more than $6 billion in additional capital through 2025.

“We do not envision investors bidding CVNA meaningfully higher until prospects for a manageable and sustained capital base become clearer,” Nagel wrote.

JP Morgan analyst Rajat Gupta wrote a note to investors on Tuesday, saying, “We believe CVNA is far from out of the woods, as even when the industry bottoms out, we don’t see a V-shaped recovery.” Last week, Morgan Stanley pulled its rating and price target for the stock, with analyst Adam Jones citing the deteriorating used car market and volatile funding environment.

Online used-car retailer Carvana has seen its stock plummet from an all-time high of nearly $377 per share in August of 2021 to just $6.50 per share this week – a decline of 98%. Shares of the company were up more than 7% in premarket trading on Tuesday after declining 18% on Monday.

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