On Friday, Carvana Co. (NYSE:CVNA) stock was reiterated at Sector Perform by analysts at RBC Capital Markets following a recent report by Hindenburg Research.
The report echoed previous short-selling arguments from 2018-2019, casting doubts on the sustainability and accounting practices related to Carvana's Other Gross Profit Unit (GPU), which includes financing, warranty, and insurance products.
"Our sense is this is likely to prove out as more noise than anything with the identity of the mystery buyer of finance receivables being a possible linchpin to the authors' argument," the firm said.
A critical point of contention in the short seller's report was the identity of the buyer of finance receivables, which the analyst indicated could be key to the short seller's claims.
Despite the short seller's report, RBC Capital reiterated its outlook for Carvana, previously published in their 2025 forecast. The firm had identified Carvana as a compelling name within the Sector Perform category, where they believe that the consensus estimates on Wall Street might be underestimating the company's potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.