Analysts lauded the improved results and the flexibility afforded by the deal. But those same analysts and others noted that the debt relief is temporary and the company still reported a significant, if much narrower, loss. Carvana needs to demonstrate its business model can consistently deliver results, they said.
The debt restructuring could buy Carvana some temporary relief. However, the high payment-in-kind coupons for the first two years "will likely put the company back in nearly the same position it was previously absent a meaningful improvement in the business or a redemption of some or all of the new notes," J.P. Morgan analysts wrote.