Mr. Dimons Next Cockroach Probably Isn’t Carvana - And Tricolor Isn’t Every Story
When Jamie Dimon warned about “one cockroach in the credit kitchen,” he was talking about hidden failures in the finance world (like a small auto lender collapsing). That triggered a flood of headlines asking: Is Carvana Co. (NYSE: CVNA) the next one?
Here’s the straight talk: Carvana is risky, no doubt. But it’s not the same as the silent, off-balance-sheet lender that collapses overnight. It’s showing real improvement — yet the stakes are high and the margin for error is small.
Where Carvana Stands Right Now
What’s going well:
- Sold over 143,000 vehicles in Q2 2025, up about 41 % year-over-year. (SEC)
- Revenue of $4.84 billion in Q2 2025, up ~42 % y/y. (SEC)
- Net income of $308 million (net income margin ~6.4 %). (SEC)
- Announced the expansion of its “Inspection & Reconditioning Center (IRC)” capability at the ADESA Long Island site, marking the 10th such IRC integration in 2025. (Carvana)
What you’ve got to keep an eye on:
Profits are up, but cash-flow conversion is lumpy (the model is scaling, but timing/working capital remain risks).
- Older loan pools (vintages 2021-22) made when underwriting was looser still hang over the business.
- Leverage remains high and the model depends heavily on securitization/ABS markets staying open.
- Insider behavior & regulatory flags: Executives have been selling shares, states have raised complaints about titles/registration delays.
- With operational expansion (e.g., 100 jobs at the Long Island site) that adds cost and execution risk. (Long Island Business News)
Translation: Why It Matters for Dealerships
When Carvana’s engine runs strong, they bid aggressively in the lanes - you’ll feel it as a dealer.
- When they stumble, pricing loosens, inventory flows shift and the market realigns.
- Their performance influences digital retail confidence, which impacts your lead-gen, buyer behaviour and “used car vs. new car” dynamics.
- The credit side is less visible in the showroom, but when Carvana’s loan engine sputters, the ripple reaches auctions, F&I margins, turn rates and floor planning.
The Takeaway
Carvana is not a hidden cockroach waiting to jump out of the credenza, at least not yet. The company is scaling, showing profits, and executing. But here’s the fine print: the market now expects near-flawless performance. One mis-step (loan losses, funding squeeze, cash-flow miss) could flip this story.
For you, the dealer, the used-car guy, the auction-roofer; watch Carvana like you watch inventory turn: not because you want it to fail, but because how they move tells you how the market moves.
“The danger isn’t Carvana collapsing. It’s everyone assuming all success stories in auto retail must end that way.”
What’s Next
- Q3 2025 results drop on October 29, 2025 - mark that. (TipRanks)
- Look for updated cash-flow numbers, margins on new loans, and how Carvana talks about old vintage loan performance.
- Also keep an eye on stories around titles/registration or state-level compliance.
Sources
Carvana Q2 2025 shareholder letter & press release: “We sold over 143,280 retail units… Revenue $4.84B…” (SEC)
Carvana press release: “Carvana Brings Inspection and Reconditioning Center Capabilities to ADESA Long Island…” (Carvana)
CBT News: “Marketing article – Carvana posts record Q2 results, lifts 2025 forecast…” (CBT News)
LIBN (Long Island Business News): “Carvana expanding ADESA Long Island, 100 new jobs…” (Long Island Business News)
MarketBeat/Tipranks: Earnings date for Q3 2025 & insights. (TipRanks)
