Carvana’s 9,000% Rally Faces Profit Test as Used-Car Woes Mount

The used-car industry isn’t exactly on firm footing, going by recent events. A major lender went bust just before a big parts supplier followed suit. Loan delinquencies have skyrocketed, car prices remain high and the lower-end consumer is showing signs of buckling.

Then there’s Carvana Co. The online retailer has delivered several strong quarters of earnings by cutting costs, restructuring debt and slowing a breakneck expansion. Its shares have rallied 78% this year, pushing its rebound from a rout in 2022 to 9,000%.