What happened

Shares of Carvana (CVNA 32.09%) were climbing last month as a series of bullish analyst reports, positive third-party data, and momentum from the recovery pushed the online used car dealer higher. According to data from S&P Global Market Intelligence, the stock finished June up 29%.

As you can see from the chart below, the stock's gains were uneven, but it still finished sharply higher.

CVNA Chart

CVNA data by YCharts.

So what

Carvana stock jumped 19% on June 2, though there wasn't a clear reason for the surge. Reports from data analytics firms M Science and YipitData appeared to show Carvana's sales improving while rival Vroom (VRM 18.88%) said it would target a $2 billion valuation in its IPO .

A Carvana vending machine tower

Image source: Carvana.

The following week, two analysts increased their price targets on Carvana with Nomura lifting its target from $89 to $105 as analyst Steve McManus said April would be the trough in sales. Needham analyst Brad Erickson hiked its price target from $100 to $135, and lifted his EBITDA forecast after dealer checks. He also expressed confidence in end-user car demand and consumers' willingness to shop for vehicles online.

That same week, Vroom shares doubled on its IPO, which may have led to increased interest in Carvana.

Toward the end of the month, Carvana launched a direct-purchase platform for dealers to buy wholesale vehicles from Carvana.

Now what

Carvana shares have bounced back strongly from the March crash as investor enthusiasm has increased for e-commerce stocks. Though Carvana is unprofitable and the stock is heavily shorted, the car dealer has seen sales double every year since it was founded.

That streak will come to an end this year given the impact of the pandemic and moderating sales growth as the company matures, but Carvana is still chasing a huge market opportunity. The stock should continue climbing as long as top-line growth remains strong.