Shares of Carvana (NYSE:CVNA | CVNA Price Prediction) trade near $460 today, and amazing rally from just $309 a share on November 21st. Despite the run, retail investors across Reddit and X aren’t convinced. It’s not just Carvana either, retail investors seem uniformly very bearish of the space. CarGurus (NASDAQ:CARG) and Cars.com (NYSE:CARS) face identical bearish sentiment scores of 8 to 12 out of 100. Those are among the lowest scores we currently track on 24/7 Wall St and are specific to this subsector.
On Reddit’s r/wallstreetbets, with traders painting the entire sector as fundamentally broken.
The most viral post came from user lord_denister, who accused Carvana insiders of using the company’s December S&P 500 inclusion as an exit strategy. “While we were getting margin called, the people actually running this company have been not so quietly sprinting for the exits,” the post read, drawing 3,074 upvotes and 399 comments. The author detailed over $500M in insider sales across six months, with CEO Ernest Garcia III allegedly selling shares daily and executives dumping tens of millions in early December alone.
CVNA insiders dumping $500M+ right as index funds are FORCED to buy for S&P inclusion
by u/lord_denister in wallstreetbets
Why Retail Traders Are Uniformly Bearish
The negativity extends beyond Carvana’s insider selling controversy. Reddit discussions frame the entire auto marketplace sector as facing existential threats. Three concerns dominate the conversation:
- Carvana missed Q3 earnings estimates by 22%, breaking a seven-quarter beat streak
- Traditional competitor CarMax shows declining fundamentals with earnings down 25% year-over-year
- Marketplace platforms like CarGurus and Cars.com face disruption from AI-powered search tools and changing consumer behavior
The uniformity is striking. All three stocks receive identical “very bearish” classifications despite different business models. Carvana sells cars directly, while CarGurus and Cars.com operate as marketplace platforms connecting dealers with buyers.
Sector Weakness Beyond Social Media
CarMax provides context for the broader malaise. The established used car retailer trades with a profit margin of just 1.84% and quarterly revenue down 5.3% year-over-year. Analysts assign mostly hold or sell ratings with a target price of $40, near current levels. CarGurus reported stronger results with Q3 revenue up 14% and operating income surging 134%, yet shares trade around $38, down from highs earlier this year. For investors watching this space, the Reddit sentiment reflects genuine sector headwinds rather than isolated company issues.
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