Carvana Co (NYSE:CVNA) stock is trading higher Friday afternoon, extending momentum from a Wedbush upgrade that raised the price target to $400. Here’s what investors need to know.

• CVNA is delivering impressive returns. See what the experts say here.

What To Know: Analyst Scott Devitt cites Carvana’s trajectory toward 3 million annual unit sales by 2033 and rapidly improving margins as key drivers.

However, the macro backdrop is providing equal support. Goldman Sachs' recent prediction of a December interest rate cut acts as a double-barreled catalyst specifically for Carvana's business model.

First, on the demand side, Carvana's aggressive expansion into sub-prime and lower-prime financing makes its customer base highly sensitive to APR fluctuations. A rate cut lowers monthly payment hurdles, directly expanding the addressable market for used vehicles and supporting the company’s projected 23% compound annual growth rate.

Second, on the operational side, lower rates reduce the cost of Carvana's variable-rate floor plan financing (the cost to hold inventory). More importantly, as rates fall, the secondary market for auto loan securitization typically improves.

This allows Carvana to sell the loans they originate at higher premiums, immediately boosting the “stronger gross profit per unit” Wedbush highlighted. This monetary easing is essential for Carvana to achieve its long-term 13.5% adjusted EBITDA margin goal without choking off consumer demand.

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Benzinga Edge Rankings: Data from Benzinga Edge supports the current optimism, assigning Carvana a near-perfect Growth score of 99.10 while flagging positive price trends across short, medium and long-term timeframes.

CVNA Price Action: Carvana shares were up 4.89% at $374.79 at the time of publication on Friday, according to Benzinga Pro data.

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How To Buy CVNA Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Carvana’s case, it is in the Consumer Discretionary sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

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