On January 7, we said:

“Carvana (CVNA) just dropped about $16 a share. All thanks to a bearish report from the short sellers at Hindenburg Research, which says the CVNA pullback is a “mirage” propped up by unstable loans and accounting issues. once the fear of the Hindenburg report has been priced in, investors may want to consider using the weakness as a strong buy opportunity. At this point, the pullback is overkill.”

At the time, CVNA traded at about $195 a share.

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Today, it’s now back up to $230.50 and could potentially retest a high of $260 near term. Helping, analysts at RBC Capital upgraded the CVNA stock to outperform with a price target of $280 a share. “After Carvana’s remarkable turnaround last year, we see the controversial pullback as an opportunity,” RBC Capital added, as quoted by Seeking Alpha.

Analysts at JPMorgan also brushed off concerns in the Hindenburg report, citing many were “known unknowns that investors have been cognizant of, and have absorbed over the last several years.”

BTIG also said: “In our view, a lot of this ground has been covered by previous short sellers as the report touched on many of the same topics … While plausible questions are raised at times, we find other arguments unconvincing,” as also quoted by CNBC.

In our view, CVNA is still a strong buy opportunity at current prices.

Sincerely,

Ian Cooper