Both Peloton and Carvana are melting up while the rest of Wall Street sells off
Whenever there's a broad-market selloff, its always fun to look through the rubble and pick out the contrarian stocks making outsized moves higher. For Peloton Interactive Inc (NASDAQ:PTON) and Carvana Co (NYSE:CVNA), does their outlier performance today -- and for the last year -- have any staying power, or is it all a flash in the pan?
PTON is up 26.3% to trade at $8.40, and earlier traded as high as $8.92. The fitness company reported an earnings triple play for the fiscal first quarter, and got an extra boost from announcing former Apple (AAPL) executive Peter Stern as CEO. The shares have now more than tripled off their May 2 record lows at $2.70, and are 74% higher year-over-year.
Despite the outstanding results, not a single analysts has issued upgrades and/or price-target hikes. They're suddenly overdue, as 17 of the 19 in coverage maintain "hold" or worse ratings, while the consensus 12-month price target of $5.66 is now a 32.5% discount to its current perch.
CVNA is up 23.5% to trade at $255.90 and earlier hit a two-year high of $259.39, after an earnings triple play of its own for the third quarter. CVNA is one of the best stocks on Wall Street in 2024, up 384% and a far cry from its Nov. 1 12-month bottom of $25.09. Furthermore, the equity's April and September pullbacks found support at the stock's ascending 80-day moving average.
Analysts are quicker on the draw for this one, with five brokerages hiking their price targets, the highest coming from Wells Fargo to $300 from $230. There's still short squeeze potential, though, as bears hit the exits. Short interest fell 6.2% in the most reporting period, yet the 13.64 million shares sold short accounts for 11.7% of CVNA's total available float. At the stock's average pace of trading, it would take shorts four trading days to buy back their bearish bets.