Why Carvana Stock Is Popping Off

Carvana Co CVNA shares are trading higher by 13.9% to $56.08 Thursday afternoon. Shares of several used car retailers are trading higher amid the approaching UAW strike deadline. A strike could impact vehicle production at large automakers and potentially drive used car prices higher.

Why It Matters

During a UAW strike, production of new vehicles may be disrupted or delayed. As a result, consumers who were planning to buy new cars may turn to the used car market as an alternative. This increased demand for used cars could benefit Carvana, potentially driving up sales and revenues, which could lead to a rise in its stock price.

When new car prices rise due to a strike-related supply shortage, some consumers may opt for more affordable used cars instead. Carvana's online platform offers a range of used vehicles at various price points, making it an attractive option for price-sensitive consumers during a strike.

What's Going On?

The odds of a United Auto Workers strike are 90%-plus, Evercore ISI analyst Chris McNally said Thursday. 

"A good compromise is when both sides are unsatisfied," McNally wrote in a note. "We are likely going to have a bunch of discontented people."...Read More

According to data from Benzinga Pro, CVNA has a 52-week high of $57.19 and a 52-week low of $3.55.