CVNA enters its July 29 Q2 earnings release with short sellers continuing a quiet retreat — a trend that has now held for several weeks — while the stock itself has given back ground since the prior print.
The short position remains enormous in absolute terms, but the direction has shifted. Short interest has eased to 50.1% of free float, down from peaks above 52% in late June and from 50.8% at the time of last week's trader note. That's roughly 5 million shares covered over the past month. The borrow market remains structurally loose: availability has actually widened further to 578%, meaning for every share currently lent out, more than five remain available to borrow. Cost to borrow is near flat at 0.45% annualised — negligible friction for anyone wishing to initiate or extend a short position. The stock has dropped 10% over the past week to $60.46, extending a 7% slide over the past month, which gives shorts some paper gains to protect. Options positioning has ticked marginally more defensive, with the put/call ratio rising to 0.84 on Thursday from the low-0.72 range earlier in the week — but at less than one standard deviation above its 20-day mean of 0.78, that reading barely registers as unusual.
The analyst community is delivering a mixed pre-earnings message. Barclays nudged its target modestly higher to $94 this week while maintaining Overweight, but Wells Fargo trimmed its target to $85 from $95 — also maintaining Overweight, which is itself a signal: bulls are staying constructive even as they dial back near-term expectations. Jefferies cut its target earlier in July to $90 from $95 on similar grounds. The Street's mean target of ~$90 sits roughly 50% above the current price, a gap that implies significant conviction among covering analysts — or unresolved uncertainty about whether the stock's recent slide is justified. The bull case rests on Carvana's digital market leadership and long-term unit economics; the bear case centres on weakened gross profit per unit estimates following recent ABS deal analysis, inventory constraints, and the broader pressure on its securitisation model.
Institutional ownership adds an interesting wrinkle. Capital Research and Management added a striking 49 million shares in the quarter ended June 30, lifting its stake to nearly 12% of shares outstanding — a move that dwarfs the modest trimming seen from other large holders. That kind of conviction buying from a major active manager, into a 22% YTD decline, suggests at least one significant voice on the buy side views current levels as materially undervalued. Insider activity over the same window was directionally negative, with the CFO and other executives selling in early July, though at relatively low significance scores.
The July 29 print is therefore less about whether Carvana can sustain unit volume and more about whether gross profit per unit can hold up against the pressure the ABS deal data has flagged — and whether management's commentary on inventory and securitisation costs can give the bull case the data it needs to close a 50% gap to consensus targets.
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