It would be incredibly expensive for a brick-and-mortar dealership to amass massive market share, but that's not an issue for e-commerce platforms. It would be an understatement to say the second quarter was unusual. Vroom Delivers Ahead of Growth Plan Ecommerce Unit Sales Up 74% NEW YORK, Aug. 12, 2020 (GLOBE NEWSWIRE) -- Vroom, Inc. (NASDAQ:VRM), a leading e-commerce platform for buying and selling used vehicles, today announced financial results …
See you at the top! Jeremy Bowman has no position in any of the stocks mentioned. Vroom Stalls Out After Its Debut Earnings Report. Cumulative Growth of a $10,000 Investment in Stock Advisor, Is Vroom About to Race 775% Higher? Vroom's revenue grew 39% in 2019 compared with the prior year, and in Q1 2020 the company posted an accelerated 60% jump in revenue compared with the prior year's quarter, which suggests growth is still accelerating. In fact, its top 100 dealers account for only 8.6% of market share, leaving immense runway for asset-light business models such as Vroom's to expand market share using competitive advantages and e-commerce prowess.
InvestorPlace 09/11/20. Market data powered by FactSet and Web Financial Group. While a forecast decline in average selling prices and overall revenue in the third quarter may be understandable reasons for traders to sell off the stock -- especially after its post-IPO surge -- those issues don't reflect long-term headwinds for the company. Another problem Vroom solves is that an online selection of vehicles can dwarf the offering of traditional brick-and-mortar used-car dealerships.
The Company offers new and used cars, spare parts, and accessories, as well as provides maintenance, repairing, funding, insurance, and vehicle renting services. The used-car market is massive, ripe for e-commerce disruption, and can help solve historical consumer dissatisfaction and distrust of traditional dealerships. Debut, Auto Sales Platform Vroom Surges in Trading Debut, VC-Backed Car Site Vroom Tops IPO Goal to Raise $468 Million, Online Automotive Retailer Vroom Announces $450 Million Floorplan Commitment from Ally Financial.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. While peer-to-peer transactions make up roughly 50% of the used-car market, the ability to avoid a potentially sketchy situation with an unknown person, and often with a lack of secure payments, is valuable to many and is certainly a reason to consider Vroom when selling, trading, or buying used cars.
Vroom already offers online shoppers access to thousands of fully reconditioned vehicles, and that selection will only grow as the company increases its network and business footprint. Here's the kicker: Industry reports estimate that e-commerce penetration in the used-car industry will reach as much as 50% by 2030, which would be a staggering boost for online used-car buying platforms.
Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. Vroom had an excellent debut on the markets with its stock doubling to over $44 per share, but investors have to temper expectations that this young company is the next Carvana. FAQ (855) 524-1300 Email. Carvana filed for an IPO in March 2017. Returns as of 09/24/2020.
In fact, the company is targeting gross profit per unit in the $1,600 to $1,700 range in the third quarter, much higher than the $1,075 it posted in the second quarter, and slightly ahead of the $1,577 it had in the quarter a year ago. Vroom, Inc. retails automobiles. On the earnings call, Hennessy said Vroom reduced its inventory from $200 million to $70 million, which impacted both average selling price and gross profit per unit.
Revenue in the key e-commerce segment (Vroom's growth business) rose 45.2% to $175.6 million.