Navigating Market Opportunities Amid Shifting Consumer Price Dynamics: Three Stocks in Focus

December’s consumer price data painted a mixed picture of inflation’s trajectory. While core prices demonstrated restraint—rising just 0.2% month-over-month and 2.6% year-over-year, the slowest pace since early 2021—broader inflation metrics told a different story. The headline CPI advanced 0.3% monthly and 2.7% annually, with food categories particularly pronounced at a 0.7% monthly jump and 3.1% yearly climb. Despite lingering above the Federal Reserve’s 2% comfort zone, the cooling core reading surprised many forecasters.

Within this economic backdrop, specific market segments revealed distinct opportunities. The used automotive sector emerged as a notable beneficiary, posting its sharpest price declines across major categories outside commodities. This development carries meaningful implications for digital marketplaces facilitating vehicle transactions.

Automotive E-Commerce Platforms Position Themselves as Winners

Used vehicle pricing dynamics shifted meaningfully in December, with a 1.7% unadjusted monthly contraction and 1.1% seasonally-adjusted decline—despite remaining 1.6% higher year-over-year. This normalization may catalyze renewed consumer interest in the secondhand vehicle market.

Cars.com Inc. (CARS) presents an intriguing entry point from a valuation standpoint. Trading at $12 per share with a forward earnings multiple of merely 5X, the platform appears undervalued relative to near-term prospects. The company currently maintains a Zacks Rank of 3 (Hold), though internal challenges—including leadership transitions and insider activity—have weighed on sentiment. Notably, Cars.com projects 33% EPS growth reaching $2.35 in fiscal 2026, though the firm carries a history of missing quarterly benchmarks. Investors await Q4 2025 earnings on February 26th to assess execution capability.

Carvana Co. (CVNA), the self-proclaimed leader in rapid-growth used car retail, has demonstrated more reliable execution against ambitious expansion targets. The stock’s remarkable ascent—gaining approximately 6,000% over three years—reflects consistent market share gains. At $450+ per share, CVNA commands a 64X forward multiple that appears steep, yet profitability metrics justify the premium. FY25 earnings are forecast at $5.49, representing 245% growth from 2024’s $1.59. Further, FY26 EPS projections suggest an additional 33% advance to $7.31. With a PEG ratio hovering near 1.0X, valuation metrics relative to growth rate suggest reasonable pricing for the platform’s trajectory. Following a +30% surge over the past quarter, CVNA carries a Zacks Rank of 3 (Hold), with Q4 2025 results due February 18th.

Meat Processing Sector Faces Headwinds Despite Higher Food Inflation

The CPI data revealed a pronounced vulnerability for protein producers. Meat, poultry, and fish categories registered nearly 7% annual price appreciation, driven substantially by a 16% beef and veal surge that increased 1% monthly. Ground beef pricing is approaching $7 per pound amid constrained livestock supplies.

Tyson Foods Inc. (TSN), a leading meat processor, exemplifies this sector’s challenges. The company confronts severe margin pressure within its beef operations due to tight cattle availability and mounting input expenses. When livestock supplies contract, processors absorb higher acquisition costs but face consumer resistance to full pass-through pricing. This structural squeeze has manifested as deepening losses in the beef segment. The stock currently holds a Zacks Rank of 4 (Sell), with analyst EPS revisions trending downward across both FY26 and FY27 estimates following recent 60-day contractions. While improved long-term opportunities may emerge as cattle supplies normalize, near-term recovery appears unlikely.

Investment Framework Going Forward

The December inflation narrative creates a nuanced opportunity set. While certain sectors benefit from disinflation in specific categories—particularly the used vehicle ecosystem—others face compressed economics that could persist. Careful stock selection within this environment distinguishes between temporary headwinds and structural value creation.