Carvana, Freshpet and Peloton could feel the cash burn as the Fed raises interest rates, according to independent equity research firm New Constructs.
Carvana Co., Freshpet Inc. and Peloton Interactive Inc. could feel the cash burn as the Fed raises interest rates, according to independent equity research firm New Constructs.
This, in turn could further squeeze liquidity and create an escalating series of corporate defaults. “Carvana has failed to generate positive free cash flow in any year since going public in 2017,” he added. “Since 2016, Carvana has burned through $8.3 billion in FCF .” Another zombie company is pet food maker Freshpet FRPT, +8.62%, according to the New Constructs CEO. “Freshpet’s stock surged during the pandemic, as investors ignored the company’s years of cash burn, and now, investors are finally waking up to the dangers embedded in Freshpet’s stock, which could decline to $0 per share,” he wrote. “Freshpet has grown the top line at the expense of the bottom-line, and sales growth has driven more cash burn.