Carvana CVNA is traversing rough waters as is evident from its share price decline of 91.7% so far this year. Shares of the used car e-retailer hit a 52-week low of $18.81 on Friday, before closing the session at $19.27. Friday’s decline of about 9% came amid a wider market selloff.

September’s job report was out on Friday. Employment Situation report came in better than expected with 263,000 new jobs created in September versus the consensus for 250,000. With jobs still hot, it seems that the aggressive rate hikes so far have not had much of an impact on slowing down the economy (and thus inflation) and that the Fed will need to keep jacking up rates.

Well, amid rising interest rates and economic uncertainty, the entire auto sector is under pressure. But Carvana has suffered a rather massive blow owing to its weak financials, escalating expenses and management’s gloomy outlook. Now, the company doesn’t expect to generate positive EBITDA until next year. Amid the challenges, Carvana currently carries a Zacks Rank #4 (Sell).

While we delve into what’s ailing Carvana, we would also highlight why a few auto retailers like Sonic Automotive SAH, Group 1 Automotive GPI and AutoNation AN still look promising despite the headwinds grappling the broader auto market.

Since Carvana went public in 2017, it has not yet turned an annual profit. In fact, its net loss has mostly been widening. Net loss incurred in 2017, 2018, 2019 and 2020 was $164.3 million, $254.7 million, $364.6 million and $462.2 million, respectively. While the second quarter of 2021 marked the first positive net income quarter for the company, for full-year 2021, the company again incurred a net loss of $287 million. In both the first and the second quarters of 2022, the firm incurred a wider-than-expected loss. Amid the firm’s persistently rising capital investments to expand the business, Carvana is not likely to generate net annual profit this year as well.

The economic slowdown and rising interest rates are only adding to the woes. With the cost of vehicle financing increasing and recession threats looming, customers are likely to put such discretionary expenses on the back burner, which may hurt sales. Early this month, CVNA’s close peer CarMax missed earnings expectations amid a decline in the number of vehicles sold.

It should be noted that the used car market is gradually slowing down. Both the Manheim Used Vehicle Value Index and non-seasonally adjusted prices declined year over year in September. With wholesale used car prices starting to recede as the market cools, retail prices could be next to fall. If the demand for vehicles doesn’t hold up well, falling used car prices will severely weigh on gross margins.

In light of the uncertain macro environment and inflationary concerns, Carvana has also withdrawn its 2022 outlook. Discouragingly, the company has pushed back the GPU expectation of over $4,000 to 2023. Also, its forecast of achieving EBITDA breakeven in the last three quarters of 2022 combined has now been pushed back amid broader industry challenges and macroeconomic headwinds.

Investors believe that cash is king in the current environment of high inflation, rising rates, and an economic slowdown. But Carvana’s stretched balance sheet is a big concern. As of Jun 30, 2022, Carvana’s long-term debt rose to $6,605 million from $3,208 million as of 2021-end. Its debt-to-capital ratio stands at 0.90 compared with the industry’s 0.27. Elevated leverage, both in absolute and relative terms, restricts the firm’s flexibility to tap into growth opportunities. The firm’s debt is also quite high compared with cash and cash equivalents of $1,047 million. Its cash ratio is just 0.5.

Carvana has been bearing the brunt of escalating selling, general and administration (SG&A) expenses since its inception and the trend is likely to continue. SG&A costs amounted to $786.7 million, $1,126 million and $2,033 million in 2019, 2020 and 2021, respectively. In the last reported quarter, SG&A flared up 53.4% year over year. Amid high capex and other expenses, the firm hasn’t recorded positive free cash flow.

Strong liquidly profile and positive free cash flows become all the more important amid uncertainties in the global economy, market disruptions and dislocations. With Carvana constantly incurring losses and generating negative cash flow, you should stay away from the stock. With the stock 94% off its 52-week high, if you think it represents a buying opportunity, it’s not. Unfortunately for Carvana and its shareholders, the stock looks more like a value trap, even at current levels.

It should also be noted that Carvana has a high beta of 2.7. With the market sailing through a historically-volatile year, a high beta stock is perceived as riskier as it is more susceptible to the market’s moves.

The Zacks Consensus Estimate for CVNA’s 2022 bottom line is pegged at a loss of $8.90 a share, implying a year-over-year deterioration of 446%. The consensus mark for loss has widened 51 cents in the past seven days.

While the aforementioned factors have made Carvana a risky pick, not all industry players have been losing ground. A few have managed to maintain a firm footing on the back of effective strategies, cost-containment efforts, strategic acquisitions and diversification. These strategies have been aiding them to counter the sector’s weakness effectively. We present three stocks from the auto retail space that should be on your radar for long-term gains.

Sonic: Sonic is committed to optimizing its Franchised Dealership business, both through organic growth initiatives and strategic acquisitions. The buyout of RFJ Auto Partners has substantially boosted Sonic’s portfolio and geographical footprint and has catapulted the company into the top-five biggest dealership groups in the United States.Its strategic partnership with Cox Automotive and Darwin Automotive to develop a proprietary e-commerce platform and user interface bode well for Sonic. SAH is likely to gain from strong organic growth fueled by its EchoPark unit expansion. The company’s commitment to actively pursue capital deployment strategies to boost shareholder value through dividend and share repurchase programs is also praiseworthy.

The company currently carries a Zacks Rank #3 (Hold) and has a Value Score of A. The Zacks Consensus Estimate for SAH’s 2022 earnings per share and sales implies year-over-year growth of 17.5% and 24.4%, respectively.

Group 1: Group 1's diversified product mix and multiple streams of income reduce its risk profile. GPI’s acquisitions of dealerships and franchises to expand and optimize its portfolio are likely to boost its prospects. In 2021, the company acquired Prime Automotive in the Northeastern United States and the Robinsons Group in the UK, which diversified Group 1’s footprint and are set to buoy top-line growth. Last year, GPI completed transactions representing $2.5 billion of acquired revenues. The AcceleRide platform, Group 1’s online retailing initiative, augurs well for long-term growth. Group 1’s investor-friendly moves instill optimism. In August, the company hiked its payout and boosted share repurchase program.

Group 1 currently carries a Zacks Rank #3 and has a Value Score of A. The Zacks Consensus Estimate for GPI’s 2022 earnings per share and sales implies year-over-year growth of 30% and 16.5%, respectively.

AutoNation: Diversified product mix, digitization ramp-up, strong vehicle margins and strategic buyouts are set to fuel AutoNation’s prospects. The acquisitions of Peacock Automotive Group and Priority 1 have buoyed AutoNation’s portfolio. Increased focus on cost discipline is aiding margins. With the launch of its digital platform AutoNation Express, the company has stepped up its digitization game. AutoNation is committed to operating at/below 60% selling, general and administrative as a percentage of gross profit in 2022, signaling a major improvement from its 71%-73% range over the last several years. Thanks to solid income generation, the firm is committed to shareholder value maximization, boosting investors’ confidence. In July, AutoNation boosted its buyback authorization by $1 billion.

AN currently carries a Zacks Rank #3 and has a Value Score of A. The Zacks Consensus Estimate for AutoNation’s 2022 earnings per share and sales implies year-over-year growth of 35.4% and 5%, respectively.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report   AutoNation, Inc. (AN) : Free Stock Analysis Report   Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report   Sonic Automotive, Inc. (SAH) : Free Stock Analysis Report   Carvana Co. (CVNA) : Free Stock Analysis Report   To read this article on Zacks.com click here.   Zacks Investment Research

Carvana (NYSE: CVNA) is in the business of selling used vehicles, but since its 2017 initial public offering (IPO) it has been on a roller-coaster ride rather than a relaxing drive. One graphic that emphasizes Carvana's reliable playbook for entering markets isn't talked about enough. More simply, it shows investors Carvana's ability to develop markets over time.

Maybe you checked out this article looking for a dividend stock that can perform well regardless of stock market conditions. Or perhaps macroeconomic conditions are your greater concern. Either way, you're in luck.

Currently, AT&T sports a high 7.4% dividend yield, which means the company will pay an estimated 7.4% of its stock price to shareholders each year. This number constantly fluctuates because it is calculated using the annual dividend payout divided by the stock price. The yield rises if the dividend goes up and the stock price stays the same.

Inflation and higher interest rates could be here to stay. BofA says changing demographics, deglobalization, and underinvestment in energy production have created a new “regime” for the global economy.

Investors seemingly can’t stop trying to pick a stock market bottom, no matter how bad the news—and it continues to backfire. Consider: This past Thursday, September’s consumer inflation report came in much hotter than expected, with the core CPI hitting a 40-year high. The initial response was exactly what you’d expect—the traded down as much as 2.4%—but then it started rallying…and rallying.

Being patient doesn't always pay off.

MarketWatch Picks has highlighted these products and services because we think readers will find them useful; the MarketWatch News staff is not involved in creating this content. And at a 2009 shareholder meeting, Buffett noted that the first best thing you can do to protect against inflation is to invest in yourself and your skills: “If you’re the best teacher, if you’re the best surgeon, if you’re the best lawyer, you will get your share of the national economic pie regardless of the value of whatever the currency may be,” he said.

(Bloomberg) -- Tesla Inc. shares tumbled about 50% from their all-time high, amid a broader selloff in the US stock market that has hit growth and technology companies especially hard. Most Read from BloombergRolex Prices to Drop Further as Supply Surges: Morgan StanleyPutin Tried for Years to Stop His Military From Using Western Parts — And Mostly FailedWorld Faces New Threats From Fast-Mutating Omicron VariantsUndervalued US Stocks Could Soar 30% Next Year, Siegel SaysStocks Upended by Inflati

Things have been even worse for the technology stock-driven Nasdaq Composite (NASDAQINDEX: ^IXIC). Historically, every double-digit percentage decline in the major U.S. stock indexes, including the Nasdaq, has eventually been placed in the rearview mirror by a bull market rally. This makes every bear market a surefire buying opportunity for patient investors.

This week’s worse-than-expected inflation report led to turmoil in more than one market, but you only read about one of them. What got far less attention was the flurry of excitement that the inflation report caused in the normally-staid I-bond market.

Investors were surprised by the big rally in the stock market on Thursday, but Friday brought another dose of reality and disappointment. After having posted monumental gains despite high readings on inflation, the Nasdaq Composite (NASDAQINDEX: ^IXIC) closed at its worst level of the year, and the S&P 500 (SNPINDEX: ^GSPC) and Dow Jones Industrial Average (DJINDICES: ^DJI) gave up most of their advances from earlier in the week. One of the biggest stock stories of the past several years has been Tesla (NASDAQ: TSLA).

The stock market is reeling from the pressures of a potential global recession, and central banks around the world are gearing up for the most aggressive interest rate hikes in history. The United Nations recently warned that the world is “on the edge of a recession,” which will likely be worse than the pandemic-driven recession in 2020 or the global financial crisis of 2008. Understandably, U.S. equities have taken a hit, with the S&P 500 index registering the worst monthly performance in Septe

These diversified natural-resource giants have solid balance sheets, earnings, and dividends. All that they need is a rebound in commodity prices.

Yahoo Finance Live’s David Briggs discusses stock performance for Kroger and Albertsons amid news that Kroger has acquired the U.S. grocer in a $24.6 billion merger.

Verizon Communications Inc. stock is trending on the Yahoo Finance Platform. Here is a visualization of $VZ performance over time, how that performance compares to the wider industry, and analyst projections for the current quarter.

Shares of electric vehicle (EV) manufacturer Rivian (NASDAQ: RIVN) sank in Friday morning trading. At that time, the tech-heavy Nasdaq Composite was down by 2.3%. A number of factors were working against Rivian's shares.

Jeff Bezos, the founder of Amazon, started his 2000 shareholder letter with the word "ouch." The company's stock had fallen more than 80% in the past year, a tough time for shareholders when the dot-com bubble had burst, and Wall Street was selling everything out of fear. Today, Amazon is one of the world's largest companies, which means that 2000 was a wonderful time to buy shares.

Nikola (NKLA) founder Trevor Milton was found guilty of three counts of criminal fraud on Friday in a case accusing him of spreading lies about the electric truck startup for his own personal benefit.

Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) owns a massive stock portfolio with about 50 different investments and a total market value of more than $308 billion. Here are two Buffett stocks in particular that could be worth a closer look right now, and one that has limited upside potential and is best to avoid. Many financial sector stocks have been beaten down lately, and it's easy to understand why.

Whether you made or lost money on a stock is just part of evaluating a successful trade. The process matters too.