CVNA arrives at its July 24 earnings release carrying one of the most extreme short positions in the US equity market — yet the borrow conditions around that position tell a surprisingly calm story.
Short interest has climbed to just over 51% of Carvana's free float, with roughly 72 million shares sold short. That figure has crept up about 1.6% over the past week, and the ORTEX short score has drifted higher to 58.97 — the highest reading in the recent tracking window. Yet the borrow market is nowhere near the stress those numbers might suggest. Availability is running at more than 520% — meaning five shares remain available to lend for every share already borrowed — well above the 52-week floor of 122%. Cost to borrow has eased roughly 10% over the past month to under 0.5% annualised, among the cheapest rates anywhere in the market. The result is a peculiar dynamic: a massively shorted stock where new short sellers face almost no friction in establishing positions.
Options positioning has turned modestly more defensive into the print, but not dramatically so. The put/call ratio is running at 0.86, about 0.9 standard deviations above its 20-day average of 0.78 — elevated relative to recent weeks but nowhere near the extremes the 52-week range permits (the ratio hit 8.58 at its most bearish reading of the past year). That middling z-score suggests the options market is hedging cautiously rather than bracing for a collapse. The stock itself has pulled back about 5% over the past month to $64.14, including a sharp 4.8% single-session drop on July 20, putting it more than 30% below the analyst consensus price target of $91.90.
The bull-bear debate centres on whether Carvana's GPU (gross profit per unit) can hold up as unit volume scales. Bulls credit the company's digital infrastructure, improving balance-sheet quality — an Altman Z-score above 6.5 is a notable shift from where the company was — and a sector score that has climbed to its maximum reading in recent months. Jefferies trimmed its target to $90 from $95 on July 14 while keeping a Buy rating, reflecting modest near-term caution rather than a change in conviction; RBC Capital took a similar step in June, cutting to $85 but maintaining Outperform. The Street broadly remains constructive, with BTIG holding at $97 and Barclays at $93, but the direction of travel on price targets has been consistently lower. EPS momentum over the past 90 days ranks in just the 2nd percentile of the ORTEX universe — a clear warning sign that estimate revisions have been running the wrong way. Bears point to GPU durability risks, inventory constraints, and a stock that remains richly valued at roughly 40x trailing earnings despite the recent pullback.
The institutional register adds a layer of genuine interest. Capital Research added nearly 49 million shares in the quarter ending June 30 — a very large addition relative to its existing position. T. Rowe Price holds 12.4% of shares. Insiders, by contrast, were net sellers in July, with the CFO and a founder among those who trimmed. Against a backdrop of heavy institutional accumulation and insider distribution, the earnings print will test whether the company's operational execution — particularly unit economics — can justify the gap between the current price and where the Street's most optimistic voices still see fair value.
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