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  "documentTitle": "Carvana Co. (CVNA)",
  "authorId": "53_Kerrisdale_Capital",
  "authorName": "Kerrisdale Capital",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2023-06-15 00:00:00",
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  "notes": "The slide uses a bridge-style reconciliation table to strip out non-recurring items from GPU.",
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      "kind": "callout",
      "text": "There are few lower quality ways to “beat” than pulling forward used car loan sales.",
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      "text": "Non-GAAP GPU: $4,003",
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      "text": "Carvana's updated guidance reflects an accelerated unwind of an unusually large backlog of finance receivables entering the quarter (~$1.2bn)... We estimate loan originations will total ~$1.3-$1.4bn in 2Q23...",
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      "kind": "paragraph",
      "text": "Carvana's profit \"beat\" was driven by substantially higher than guided loan sales in the quarter. As Garcia clarified in remarks made after the posting of the updated guidance, \"there was uncertainty around how much we were relying on additional receivable sales...\"",
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      "kind": "paragraph",
      "text": "There are few lower quality ways to \"beat\" than pulling forward used car loan sales. This tactic is certainly unlikely to be repeated in the second half of the year. Strip away this benefit and for all of Carvana's aggressive cost cutting, it still generates little to no EBITDA...",
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      "kind": "paragraph",
      "text": "At an investor conference last week, Carvana provided an update to its 2Q23 guidance highlighted by raising total GPU to $6,000+... But these metrics are heavily, if not entirely, driven by transient, one-time factors and not a function of improving industry or Carvana fundamentals.",
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      "kind": "quote",
      "text": "“there was uncertainty around how much we were relying on additional receivable sales, and there was uncertainty about how much we would sell in receivables. That’s the biggest change that is leading to this [updated guidance] and flowing that through speaks to the majority of the change in our GPU line item.” — Garcia",
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      "kind": "source-note",
      "text": "Source: Kerrisdale analysis. Carvana 4Q22 and 1Q23 earnings call transcripts.",
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      "kind": "table",
      "text": "Reported: 4Q22 $2,667, 1Q23 $4,796; Retail valuation adjustment: 598, (593); Wholesale valuation adjustment: 103, (200); Shift in loan sale: 483; Normalized total non-GAAP GPU: $3,851, $4,003",
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      "kind": "title",
      "text": "1Q23 Total Non-GAAP GPU Normalized for Unusual Items",
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