• CNBC's Jim Cramer warned investors against buying stock of Carvana after the company reported worrisome quarterly results on Wednesday.
• "This is a 'what have you done for me lately' market and in the near-term, I expect Carvana, they couldn't do anything for you, lately or otherwise," the "Mad Money" host said.

CNBC's Jim Cramer warned investors against buying stock of Carvana after the company reported worrisome quarterly results on Wednesday.

"There is zero tolerance for unprofitable companies, and Carvana just made it clear it will take them a heck of a lot longer to reach profitability than we thought," the "Mad Money" host said.

"Given what we heard last night, I think there's more downside here, even as I kind of think the long-term story's cool. But this is a 'what have you done for me lately' market and in the near term, I expect Carvana, they couldn't do anything for you, lately or otherwise," he added.

Carvana beat expectations on revenue but reported a wider-than-expected loss per share for its latest quarter. The online used-car retailer also saw its quarterly sales decrease for the first time.

Shares of Carvana fell 10.12% on Thursday, reaching a new 52-week low earlier in the day.

Evercore ISI downgraded Carvana from outperform to in line following the company's earnings report.

Cramer said that a problem Carvana faces is higher supply costs as well as demand destruction, as consumers become unwilling to keep paying higher prices for used vehicles. He highlighted demand destruction last week as a sign that inflation could be peaking. 

"Making matters worse, Carvana actually pulled its full-year forecast. … Companies don't pull their forecasts unless they're feeling real nervous about the future," Cramer said.

The used-car retailer also said it plans to sell $2 billion in common and preferred stock and that chief executive Ernie Garcia and his father plan to purchase up to $432 million in common stock.

"Carvana's been dogged by liquidity worries because they offer financing to their customers, then package those loans into asset-backed securities, which they then sell to investors. Unfortunately, used-car backed bonds haven't been selling too well of late. … So when Carvana raises this money, it removes a major overhang," Cramer said.

Cramer said of the chief executive's decision to purchase common stock: "I don't know if that's a wise decision. But I commend Ernie Garcia for believing in his own vision."

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