Few changes in the stock market are as dramatic as that of Carvana (CVNA).
The online used car retailer nearly collapsed in 2022, reversing eight straight years of margin improvement even as vehicle sales doubled from 2019 levels. Losses soared to nearly $2.9 billion amid growing bankruptcy concerns.
The company has since recovered from the brink, posting record revenue and gross profit per vehicle.
In December, Carvana joined the S&P 500 (^GSPC), capping a rally of more than 10,000% since 2022 that crushed short sellers along the way.
Its inclusion places Carvana alongside Robinhood (HOOD) and Coinbase (COIN), two companies that were also hit hard during the 2022 bear market and have since seen strong recoveries.
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In 2022, rising interest rates, rising inflation, and a cryptocurrency bear market caused the S&P 500 to fall 19%, its worst performance since the financial crisis and one of the worst years on record outside of a recession.
All three companies (Carvana, Robinhood and Coinbase) were at the center of that storm.
Carvana CEO and Chairman Ernie Garcia summed up the company’s survival after posting its first annual profit in 2024.
“It’s very difficult for a group to go through a period like the last two years and not disintegrate under the pressure,” Garcia said. “We did not disintegrate.”
Wall Street sentiment has also changed.
Even Morgan Stanley’s Adam Jonas, who once warned the stock could plummet to $0.10, became overweight the stock in May, calling the platform the “potential ‘Amazon of auto retail.'”
In October, the analyst wrote that he expects Carvana to grow to a 12% share of the used car market by 2040, up from 1.5% today.
“CVNA short sellers have had a scarier ride than the Conry Island cyclone,” Ihor Dusaniwsky, managing director at S3 Partners, told Yahoo Finance. “Shorts have lost $8.44 billion in mark-to-market losses since their all-time low in 2022.”
A Carvana auto retail “vending machine” and a vehicle parking lot are seen from a drone in South Fayette, Pennsylvania, on March 15, 2021. (AP Photo/Ted Shaffrey) ·ASSOCIATED PRESS
Trading platform Robinhood (HOOD), the face of 2021’s meme stock frenzy, is also back and on track to be the fourth-best performer in the S&P 500 this year after joining the index in September.
Its shares are up about 1,500% from a 2022 low of around $7, a period marked by rumors of acquisitions and aggressive layoffs to cut costs. Founders Vlad Tenev and Baiju Bhatt agreed to forego their own $500 million bonus contracts to help the company save money and become profitable more quickly.
Belt tightening was essential. While Robinhood’s 2022 revenue fell 25%, its operating expenses fell 31%.
Companies must have been profitable for the previous four quarters and have a market capitalization greater than $22.7 billion to be eligible for inclusion in the S&P 500.
Robinhood cleared that hurdle in 2024, posting its first full year of profits and snapping a three-year losing streak.
“They’ve grown along the way in terms of understanding what institutional investors demand for investments and driving both investment growth and a high level of profitability,” Citizens analyst Devin Ryan told Yahoo Finance on Wednesday.
The company spent the past year aggressively rolling out new features around its “super app,” including tokenized stocks and its fastest-growing segment, prediction markets.
In Robinhood’s goal to handle nearly every aspect of customers’ finances, CEO Vlad Tenev has even offered the platform to manage the president’s planned $1,000 “Trump accounts” for newborns.
Read more: How to Take Advantage of Robinhood’s 3% IRA Match and 1% on Transfers
Coinbase (COIN), the world’s largest crypto exchange and a key competitor to Robinhood in that space, also announced new offerings for its “everything exchange,” including tokenized assets and prediction markets.
In May, Coinbase became the first cryptocurrency platform whose shares joined the benchmark S&P 500 index, a dramatic shift for a company that had previously faced intense scrutiny and litigation from the SEC.
“Coinbase joining the S&P 500 means cryptocurrencies are here to stay,” Coinbase CEO Brian Armstrong told Yahoo Finance earlier this year.
The company’s third-quarter revenue this year rose 54% to $1.87 billion. Net income also rose to $1.50 per share, compared to $0.28 a year ago. Meanwhile, consumer business activity on the platform jumped to $59 billion, up 37% from the previous quarter.
Landmark stablecoin legislation passed over the summer helped push Coinbase stock to all-time highs, although its stock has lost most of its year-to-date gains amid the October cryptocurrency sell-off.
Still, Citizen’s Ryan remains bullish on the company, which focuses not only on retail traders but also on institutions, earning it the nickname “AWS of blockchain.”
“That means taking all of the experience and capabilities they’ve developed over more than a decade and then offering them externally to their customers so they can incorporate them into the blockchain,” Ryan said.
Despite the crypto crash, Wall Street sees the CLARITY Act market structure bill as the next big catalyst for the industry.
“What these companies have been able to do successfully is focus on where they think the puck is going and build for it,” Ryan said.
StockStory aims to help individual investors beat the market.
Inés Ferré is a senior business reporter at Yahoo Finance. Follow her on X in @ines_ferre.
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