CARVANA CO (NYSE:CVNA) – A Strong Contender for Growth Investors Following Minervini’s Strategy

Carvana Co (NYSE:CVNA) has emerged as a compelling candidate for investors using Mark Minervini’s trend-following strategy while also meeting high-growth momentum criteria. The online used-car retailer demonstrates strong technical health and accelerating fundamentals, making it worth a closer look.

Why CVNA Fits the Minervini Trend Template

The Minervini Trend Template focuses on stocks exhibiting strong uptrends with specific technical criteria. CVNA meets all key requirements:

• Price Above Key Moving Averages: The stock trades well above its 50-day ($319.41), 150-day ($254.39), and 200-day ($245.81) moving averages, confirming a bullish trend.
• Rising Moving Averages: Both the 150-day and 200-day MAs are trending upward, reinforcing long-term strength.
• Strong Relative Strength: With a ChartMill Relative Strength (CRS) score of 97.16, CVNA outperforms nearly all stocks in its sector.
• Price Near 52-Week High: At $346.10, CVNA is within 5% of its 52-week high ($364), indicating sustained momentum.
• Volatility Contraction Pattern (VCP): The stock has consolidated recently, reducing volatility and setting up for a potential breakout.

High Growth Momentum Fundamentals

Beyond technical strength, CVNA exhibits rapid growth in earnings and revenue:

• Earnings Growth: EPS surged 260% year-over-year (TTM), with the latest quarter showing a staggering 556% increase.
• Revenue Growth: Sales grew 32% (TTM), with consistent beats on analyst estimates.
• Profit Margin Expansion: Quarterly margins improved from 0.53% to 5.10% over the past year.
• Upward Revisions: Analysts have raised next-year EPS estimates by 64% in the last three months.

Technical Outlook

According to ChartMill’s technical report, CVNA scores a perfect 10 on technical health, supported by:

• A strong bull flag pattern, suggesting potential continuation.
• Multiple support levels, with the nearest at $344.68.
• High liquidity, averaging 3.78 million shares traded daily.

Our High Growth Momentum + Trend Template screener lists more stocks with similar growth and trend characteristics.

Disclaimer

This is not investment advice. Always conduct your own analysis before making any investment decisions.