Carvana shares have surged in the past three years from a near all-time low. Q3 showed strong growth and positive net income. Investor confidence is high, with a valuation near record levels. Critics debate Carvana’s sustainability, while bulls see it as an innovative disruptor in the used car industry.

Carvana’s stock has underperformed the market in the past five years but has skyrocketed in the last three years and the last 12 months. After facing concerns of bankruptcy in 2022, the company focused on cost cuts, refinanced debt, and delivered encouraging financial results in Q3.

In Q3, Carvana saw a 44% increase in unit volume and a 55% rise in revenue year-over-year. Long-term debt decreased to $5.5 billion from a peak of $7.5 billion in 2022. The company remains consistently profitable on a GAAP basis. Investors are attracted to Carvana’s growth potential in the domestic used car market, despite its expensive valuation.

Investors considering Carvana today may face the risk of overpaying due to the company’s market cap nearing $100 billion. Carvana continues to hold a significant opportunity in the used car market, with room for growth in sales and profits as it scales. The stock currently trades at a price-to-sales ratio of 3.5, approaching its most expensive multiple in 2021.

The Motley Fool’s Stock Advisor analysts recently identified the 10 best stocks to buy, with Carvana not making the cut. The Stock Advisor’s total average return is 951%, outperforming the S&P 500’s 192%. Investors are advised to consider other potential investments that could yield significant returns.

Read more at Yahoo Finance: What Has Carvana (CVNA) Stock Done for Investors?