Carvana's stock price increases following its first year of profit and two analyst upgrades.

• In an earnings report released Thursday, Carvana reported strong results and achieved its first-ever annual profit.
• Analysts on Wall Street upgraded the stock due to observed profit trends and a favorable retail sales outlook.
• Shares of the company surged 30% Friday morning.

On Friday morning, shares of the company surged 30% after posting its first-ever annual profit and receiving two upgrades from Wall Street analysts.

As the pandemic caused a surge in online car sales, Carvana's stock price increased. However, after the demand for online car sales decreased, the company was forced to implement aggressive restructuring and cost-cutting measures to recover.

The company reported its first annual profit with a net income of $450 million in 2023, a significant improvement from the loss of $1.59 billion in 2022.

Ernie Garcia, CEO, stated on CNBC's Money Movers Friday that the company is in a highly competitive position.

The company is currently in the second stage of a three-stage restructuring plan, which entails achieving profitability on an adjusted EBITDA basis, achieving positive unit economics, and resuming growth.

The quarterly report shows that the company's total gross profit per unit more than doubled to $5,283, compared to $2,219 in the previous year.

Despite the uncertain macroeconomic car selling environment, the company anticipates growth in retail units sold during the first quarter and for 2024, as stated in its earnings report.

On Friday, Raymond James analysts upgraded their rating on Carvana's stock to "market perform," citing positive GPU trends and investor sentiment that is becoming more aligned with the company's long-term market potential narrative.

Despite its pandemic high of $370 per share in 2021, the company's stock is currently trading at about $70 per share, still far from its peak value. However, the stock experienced a significant decline in 2022, causing bankruptcy concerns. These concerns have since been alleviated by signs of recovery.

Carvana's rating was upgraded to "outperform" by William Blair analysts due to the company's profit increases and unit growth. The analysts believe that Carvana is now positioned for a further breakout, as evidenced by the encouraging 2024 forecast.

Despite last year's growth and profit, Carvana, with its 1% market share, remains focused on its current inventory, according to Garcia's statement on CNBC.

Garcia stated, "I believe we must focus on our current project and ensure that our strategy involves expanding our inventory to provide customers with more options in the long run. Our ultimate aim is to offer a seamless experience, competitive pricing, and an extensive selection to our customers."