Online used-car retailer, Carvana (CVNA), is set to report its third-quarter earnings on Thursday. Ahead of the report, Carvana stock experienced a significant spike, putting an end to a series of down days.

According to estimates from FactSet, analysts anticipate Carvana to narrow its net loss per share to 70 cents, compared to $2.67 a year ago. However, revenues are expected to decline by 17% year over year, amounting to $2.807 billion. This would mark the fifth consecutive quarter of revenue declines for the company.

Important areas to watch during the earnings report include the number of wholesale and retail units sold during the quarter, as well as the gross profit per unit (GPU). Carvana had previously guided a Q3 GPU above $5,000, which has garnered significant attention from investors.

Analysts also project that Carvana will experience the first sequential increase in used vehicles sold at retail since Q2 2022, with an estimated 77,474 retail unit sales in Q3.

Despite the upcoming earnings report, Carvana stock saw a surge of 15.2% to $29.94 on Thursday. This rally came after the stock approached a test of the 200-day moving average.

Morgan Stanley analysts have expressed concerns over potential declines in pricing of new and used vehicles, which could impact Carvana's gross profit margins. The Manheim Used Vehicle Value Index, which tracks wholesale prices, experienced a 3% fall in the first half of October.

In a move to reduce its debt and foster growth and profitability, Carvana closed a debt exchange offer in September with 96% of noteholders. This deal aimed to reduce the company's debt by $1.2 billion.

Founded in 2012, Carvana revolutionized the auto industry by selling used cars online. Its unique approach, which includes car vending machines, enabled rapid growth during the pandemic used-car boom. However, the company faced challenges when consumers began tightening their budgets, leaving Carvana with an excess of costly inventory.

Despite a significant collapse in 2022, Carvana stock has experienced a remarkable surge of 525% year to date, driven by improved business trends and the possibility of a short squeeze.

Investors and industry analysts eagerly await the release of Carvana's Q3 earnings after the market closes on Thursday, which will shed further light on the company's financial performance and its outlook for the future.