The report centers on Carvana's practice of loan sales as well as the business relationship between CEO Ernie Garcia III and his father, Ernest Garcia II.

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Carvana shares continued their slide Friday after short-selling firm Hindenburg Research disclosed a short position in the company, but JPMorgan stuck with an "overweight" call on the used-car retailer,

Carvana, the online used-car retailer that last week was the target of a short-selling research report, got its first broker upgrade since then which says the controversy has sparked a buying opportunity.

Acknowledging that there is skepticism surrounding its business model and ability to sustain profitability targets, RBC Capital joins the growing list of bulls in support of Carvana, raising its rating on the stock to Outperform from Sector Perform on the upside potential to retail unit estimates and a clearer path to durable free cash flow.