As the used car market shrinks and issues with the business model become harder to reflect, the once-bright Carvana is winding down, Wedbush said. Analyst Seth Basham downgraded the stock to neutral and cut her price target 70% to $15, indicating a 17.7% downside for the stock. “While we remain cautious on the near-term outlook for CVNA, we maintain a positive long-term outlook given the potential for strong unit economics,” Basham said in a note to clients. “However, further deterioration in market conditions, a skewed cost structure and significant cash burn make it less likely to achieve this potential.” The online platform for used cars has been a winner as the economic shutdown drives consumers away from car lots and onto the Web. In the year The outbreak closed at a high of $360.98 in August 2021, nearly 300% higher than its trading value at the beginning of 2020. But the darling light of the pandemic has faded as car lots open up, supply increases and consumers shy away from big-ticket items like cars amid inflation. Carvana’s third-quarter retail unit sales are expected to decline by about 6% compared to the same period a year ago, Wedbush forecasts. Meanwhile, the stock is down about 92% this year. Basham said the decline stems not only from slipping demand, but also from concerns about how Carvana will perform as the company’s cost base is too high. In the year It should refinance the senior notes by 2025, he said. Carvana, like other e-commerce platforms including Wayfair, has considered building physical footprints as the demand for in-person presence comes from the pandemic. The company has a few dozen “car vending machines” across the country. But Basham said Carvana’s acquisition of Adesa’s U.S. auto parts business was another hit, adding $336 million in additional annual costs and undesired adjustment costs. Basham said that competitor CarMax is down about 52.4% this year because of its weak financial position. — CNBC’s Michael Bloom contributed to this report.