{
  "docId": "019dd923-622c-750b-8b98-98685acdea95",
  "docSlug": "11e962264b36",
  "documentTitle": "Carvana Co. (CVNA)",
  "authorId": "54_Spruce_Point_Capital",
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  "documentKindSlug": "activist-deck",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-03-01 00:00:00",
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  "pageNumber": 33,
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  "notes": "The slide uses a 'villain' framing by questioning the plausibility of management's projections.",
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      "text": "To achieve management’s high-end EBITDA margin target on a GPU of $3,000, Carvana would have to maintain SG&A (ex-advertising) less than 1/3 that of CarMax. How plausible is this?",
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      "text": "SG&A per used retail vehicle: $1,121",
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      "text": "With a used retail vehicle GPU of $3,000 on a run-rate used retail vehicle ASP of $20,000, EBITDA margins of 9.3% (the midpoint of management’s target mid-term range) would imply SG&A of $1,340 per used retail vehicle ex-depreciation, 47% less than CarMax (ex-CAF). If, as a more mature business, Carvana’s per-vehicle advertising costs are equivalent to those of CarMax (since this isn’t part of the business model’s supposed scalability), all other SG&A per used retail vehicle would stand at $1,121, less than half that of CarMax (ex-CAF). In other words, Carvana management is suggesting that, as a more mature business, labor costs, occupancy costs, non-COGS logistics costs, IT costs, and all other costs will be less than half those of CarMax. How likely is this cost superiority?",
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      "text": "Cost Structure - Per Vehicle Basis table comparing KMX and CVNA",
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      "kind": "title",
      "text": "Under What Cost Structure Could Carvana Possibly Achieve Its Target EBITDA Margins?",
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