CVNA shorts trim positions as stock surges 18% post-earnings

Carvana has nearly half its free float sold short, yet the past week has belonged to the bulls: shares jumped 18.1% to close at $68.29 on the back of a strong earnings print, leaving short sellers nursing losses against a position that has barely budged.

Short interest sits at 46.8% of the free float, around 66.2 million shares, down less than half a percent on the week and roughly flat over the past month. The position is large but not growing. After a noticeable step-up in early October, when short shares climbed from around 62.5 million to the current level, activity has stalled. The borrow market confirms there is no mechanical pressure on that position. Availability is running at 998%, meaning roughly ten shares are available to borrow for every one currently lent out. The 52-week low on availability was 122%, so the lending pool is close to as loose as it has been all year. Cost to borrow is 0.46%, down 18% on the week. With that much room in the borrow market, the short is a conviction trade rather than a crowded one facing a forced exit.

Options positioning shifted decisively toward calls over the same period. The put/call ratio has dropped to 0.83, more than one standard deviation below its 20-day average of 0.99. Two weeks ago the ratio was running above 1.1, reflecting genuine demand for downside protection. That demand evaporated after the earnings print showed a 15.3% single-day gain on October 28. The options market's current tilt suggests traders are no longer paying up to hedge against a drop.

The analyst response to earnings was mixed but constructive on direction. Most firms with buy-equivalent ratings nudged targets higher: Barclays moved to $82 from $80, UBS to $84 from $83, and Citizens to $85 from $83. Needham stood out as a counterpoint, cutting sharply from $120 to $100 while keeping its Buy rating, a sign of recalibrated growth expectations rather than a change in conviction. BNP Paribas, one of the few neutrals, trimmed its target to $67 from $69, just below where the stock is trading. The consensus mean price target is $80.52, implying around 18% above the current price. The forward P/E has re-rated materially this week, rising by around 5 points to 32.2x, and the EV/EBITDA multiple has moved similarly. The bull case centres on a 45% year-on-year rise in monthly web traffic and a retail-wholesale spread of $9,139 that remained stable through the third quarter. The bear case rests on a recent ABS deal that showed less favourable terms, with the over-collateralisation target rising 50 basis points, which reduces gain on sale and pressures the Other GPU line.

On the register, Ernest C. Garcia II holds a 13D position at 22.9% of the class, down from 23.9% at the prior filing in May. A Schedule 13D filing denotes activist or control-level intent and is one of the more significant structural facts about this stock's ownership. The Garcia family collectively holds a substantial proportion of shares outstanding. Capital Research is the largest institutional holder at 14%, adding around 17 million shares as of September 30. T. Rowe Price holds 11.8% and barely moved its position. Insider activity from company officers over the past 90 days has been net negative, with around $17.9 million of net selling, though most of those transactions were pre-arranged 10b5-1 plan sales and option exercises by the CFO in early October, rather than discretionary open-market selling.

Peer moves add context to the week's rally. AN gained 11.5% over the past week and ABG added 14.7%, so the sector broadly caught a bid. Carvana's 18.1% move beat the peer median but was not isolated. The ORTEX short score sits at 56.4, little changed across the past two weeks, consistent with a well-established short position that is not being actively rebuilt or unwound.

With the next earnings event not scheduled until February 18, the stock now has a long runway before the next hard catalyst, leaving the existing short position and the pace of any further analyst target revisions as the primary data points to track.