In a note released Friday, JPMorgan defended Carvana (CVNA) against claims raised in a recent Hindenburg Research report, stating that its own analysis “has not suggested any red flags” regarding the company’s financial reporting or business practices.

The Hindenburg report alleged that Carvana’s gross profit per unit (GPU) metrics and the sale of consumer auto loans to third parties lacked transparency. The hedge fund claimed to have identified $800 million in loan sales to an undisclosed “related third party,” suggesting that nearly 26% of Carvana’s gross profit over the past nine months stemmed from such transactions.

In its response, JPMorgan acknowledged that there is “room for CVNA to provide more disclosure,” but emphasized that the issues surrounding loan defaults in the auto industry are longstanding and do not materially impact Carvana’s economics. The bank also highlighted the continued strength in demand for used cars, which supports the company’s operations.

“We do not see CVNA’s reported economics as inflated,” JPMorgan analysts wrote, pushing back against the notion that the company’s financial performance is overstated.

While Carvana has been a subject of debate due to its rapid growth and innovative approach to the used car market, JPMorgan’s analysis underscores confidence in the company’s financial integrity, despite calls for enhanced transparency. As the market continues to assess the competing narratives, JPMorgan maintains that Carvana remains well-positioned amid robust demand in the used car sector.