In less than two years, a resurrection! From near bankruptcy to a market value of $50 billion, what did the new darling of the US stock market, Carvana, do right?

The new darling of the US stock market, online used car retailer Carvana's third-quarter report exceeded expectations, achieving the highest profit in its history. On October 31, online used car retailer Carvana announced a significantly better-than-expected third-quarter financial report, which showed that Carvana's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $429 million, far exceeding analysts' expectations of $326.8 million and last year's $148 million. After the report was released, Carvana's stock price surged 19.29% overnight to $247.31 per share, with a market capitalization of $51.18 billion. So far this year, Carvana's stock price has more than quadrupled. Carvana also stated that "as long as the environment remains stable," profits in 2024 will be "significantly higher" than the previous top-level forecast. However, two years ago, Carvana faced bankruptcy risks. By the end of 2022, due to rising interest rates and weak American consumer demand, Carvana's revenue had significantly declined. Faced with high interest payments and maturing debt, Carvana CEO Ernie Garcia negotiated with banker Ken Moelis and creditors, successfully persuading creditors to accept a $1.3 billion overall debt reduction in mid-2023. Additionally, the company also secured the opportunity to defer some cash interest payments. Moreover, Garcia increased his stake in Carvana, and this breathing space allowed the company to cut costs in 2023—for most of 2023, Carvana has been shrinking its business, restructuring its debt, and expanding used car sales. This year, Carvana is focused on achieving sales growth under a streamlined operational structure. In less than three years, Carvana's indirect sales cost per vehicle has decreased from $6,300 to less than $3,800. Despite the encouraging financial report, Carvana still faces high risks, with financial and operational leverage at elevated levels. It is reported that the company has a small bank internally responsible for issuing and selling auto loans.