3 Growth Stocks Worth Buying Through the Chaos and Holding for the Long Term

Carvana reported Q4 revenue of $5.6 billion, up 58% year over year, with operating income rising to $424 million and retail unit sales increasing 43% to 163,522 vehicles, though EBITDA of $511 million missed estimates of $535.7 million. Block is described as steady but undervalued, with analysts assigning a strong buy and a $87.27 12-month target, about 25% above the current price. WM is highlighted for durable demand, 23 straight years of dividend growth, and buybacks, with its scale in landfills and waste transfer facilities supporting long-term growth.

Analysis

The key market signal is not that these businesses are merely “fine”; it is that each has a different path to multiple expansion. CVNA is the most levered to operating leverage and sentiment normalization: once investors stop anchoring on quarter-to-quarter margin noise, the market will refocus on share gains in a fragmented category, where even modest consolidation can materially extend runway. The second-order effect is competitive pressure on smaller independents and offline dealers, who lack the balance-sheet flexibility to match pricing or inventory intensity if Carvana keeps scaling.

XYZ is the more interesting mispricing because stagnant share performance can coexist with compounding fundamentals when investors are waiting for a disconfirming event that never arrives. The setup suggests a “show-me” discount rather than a broken thesis: if cash flow remains stable and the feared deterioration in spend quality does not appear, rerating can happen quickly because the stock is already discounted for a worse macro path than the data imply. That creates a cleaner catalyst profile than CVNA: less dependence on perfect execution, more on absence of downside.

WM is the highest-quality defensive compounder here, but the real opportunity is not just stability — it is pricing power disguised as boring infrastructure. Supply constraints around landfill capacity and regulatory friction create a quasi-monopoly economics loop that can support pricing above inflation, while buybacks and dividend growth help compress downside in risk-off tape. The market may be underappreciating the duration of that pricing power because capex tied to adjacent businesses temporarily masks the underlying free-cash-flow resilience.

Contrarian take: the crowd is likely overestimating how much bad news is already priced into XYZ and underestimating how much good news is already priced into WM. CVNA is still the most vulnerable to any renewed scrutiny around accounting quality or gross profit per unit, so the risk/reward is asymmetric only if the next few prints confirm margin stabilization. In other words, CVNA is a tactical trade on sentiment repair, XYZ is a rerating trade on absent deterioration, and WM is the slow-burn compounding trade where the market may not grant full credit until capacity scarcity becomes more visible.

Key Decisions for Investors

• Go long WM on a 6-12 month horizon; preferred as a core defensive compounder with downside buffered by capital returns and pricing power. Risk/reward: lower upside than CVNA, but materially better drawdown profile and higher probability of positive absolute returns in choppy tape.
• Initiate a tactical long CVNA only on pullbacks or after a confirming quarter; use a defined-risk structure (e.g., call spread) rather than stock. Upside comes from multiple expansion if margin stability returns, but thesis breaks quickly if unit economics deteriorate again.
• Go long XYZ for a 3-6 month rerating trade, especially if the next earnings cycle confirms steady cash generation and no new growth-capex shock. The setup favors a sentiment squeeze, with upside if the market stops pricing in a non-existent deterioration.
• Pair trade: long WM / short a basket of lower-quality, capital-intensive waste or recycling names over 6-12 months. Thesis: scarcity and regulatory barriers should let WM widen its economics while weaker operators face margin pressure and higher financing costs.
• Avoid shorting CVNA outright unless there is fresh evidence of accounting or gross-margin slippage; the stock has too much reflexive momentum and sentiment repair potential for an undisciplined short. If bearish, express it via options with limited premium at risk.