Online used-vehicle retailer Carvana Co. continues to pile up losses as it carries out a rapid expansion strategy, but bullish investors still like what they are seeing.
The positives that emerged from Carvana's second-quarter earnings reported last week include continued spikes in revenue and retail vehicle sales, a key metric that showed narrowing losses for the first time and a huge improvement in the retailer's gross profit per vehicle.
Carvana's gross profit per vehicle rose 46 percent to $3,175 in the second quarter, passing a goal of $3,000 that the company set two years ago.
"After the second quarter, people are realizing that Carvana sets out to do something and they are, in fact, tracking to what they said," B. Riley FBR analyst Lee Krowl told Automotive News. "This kind of validation is important, especially when you're in a newer business model where there's not a lot of benchmarks."