{
  "docId": "019dd923-622c-750b-8b98-224dccbc0c0f",
  "docSlug": "bafc4d2317df",
  "documentTitle": "Carvana Co. (CVNA)",
  "authorId": "53_Kerrisdale_Capital",
  "authorName": "Kerrisdale Capital",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-02-26 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 7,
  "pageCount": 14,
  "prevPage": 6,
  "nextPage": 8,
  "slideType": "thesis_headline",
  "function": "expose_contradiction",
  "density": "balanced",
  "nDataPoints": 4,
  "notes": "The slide uses a narrative approach to expose the contradiction between Carvana's original business model and its current operational reality.",
  "elementsJson": [
    "paragraph"
  ],
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-224dccbc0c0f/7",
  "deckHref": "/decks/019dd923-622c-750b-8b98-224dccbc0c0f",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-224dccbc0c0f.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-224dccbc0c0f#slide-7",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "Carvana not only trades at nosebleed levels relative to its closest peers, even on consensus revenue growth expectations we regard as too high, Carvana now trades at a premium to leading tech players, all of whom enjoy better margins and generate free cash flow.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-25b8-778f-bc6c-c34a5c1667db",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.78,
        "x": 0.11,
        "y": 0.38
      },
      "kind": "paragraph",
      "text": "Once again, as was the case with retail GPU, Carvana’s guidance for over $1,200 in adjusted EBITDA per unit is only remarkable from the perspective of how deeply negative this figure once was.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "59c2e8ad-263d-43bc-a2ef-b36f0a574b33",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.78,
        "x": 0.11,
        "y": 0.09
      },
      "kind": "paragraph",
      "text": "According to the ADESA executive, with Carvana’s internal resources lacking, the company resorted to poaching industry veterans from CarMax who effectively copied many of the industry-best processes and procedures CarMax developed.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "9d4b4947-6134-4fba-b97e-6bb82d5b8abb",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.78,
        "x": 0.11,
        "y": 0.49
      },
      "kind": "paragraph",
      "text": "Understanding the similarities in business practices, unit economics, and longer-term growth between Carvana and auto industry peers is important given the vast disparity in trading levels.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "9dd22977-95a1-4b20-9527-799d27460130",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.78,
        "x": 0.11,
        "y": 0.18
      },
      "kind": "paragraph",
      "text": "When CEO Ernest Garcia on the most recent quarterly call described how Carvana’s customer offering is “stronger than ever” he referenced how the increased number of facilities has enabled moving cars to and from inspection centers with 20%-30% fewer miles than a year ago.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "c7f15d62-c4f7-41f0-a664-32624dd109a3",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.1,
        "x": 0.11,
        "y": 0.46
      },
      "kind": "title",
      "text": "Valuation",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "9c803043-04e2-41db-ac42-b52574197073",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "expose_contradiction",
      "slug": null,
      "matchId": "f072398f-3eda-43c7-89bb-547a54b79d7b",
      "evidence": "The slide contrasts Carvana's original 'online-only' model with its current adoption of CarMax's brick-and-mortar infrastructure.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 8,
      "from": 4,
      "beatId": "91aaca8f-9330-4f2c-90a5-2e9cfc9e88c1",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Evidence",
      "beatSlug": "evidence",
      "evidence": "The document provides evidence to support its claims, including valuation tables and peer benchmarks.",
      "position": 2,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    }
  ],
  "loops": [
    {
      "to": 8,
      "from": 4,
      "name": "Mece Breakdown",
      "slug": "40-mece-breakdown",
      "bestFor": "Problem structuring, ensuring completeness, strategic analysis",
      "matchId": "bfb1767f-0a75-4f1e-a4d7-f0f49cfcedb2",
      "evidence": "The document provides a detailed breakdown of Carvana's valuation using a 12x 2026E EBITDA estimate.",
      "position": 1,
      "objective": "How can Carvana's valuation be broken down?",
      "structure": "The Whole -> Category A (distinct) -> Category B (distinct) -> Category C (distinct) -> Complete Coverage",
      "confidence": 0.7,
      "description": "Divide a complex topic into mutually exclusive, collectively exhaustive categories"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}