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Highlights:
- In Q4 2021, Vroom's total revenue increased 130.3 per cent year-over-year (YoY) to US$ 934.5 million.
- Vroom is looking to expand, and on February 1, it announced that it completed the acquisition of United Auto Credit Corporation (UACC).
- Vroom is one of the leading e-commerce platforms for buying and selling used vehicles.
Stocks of Vroom Inc. (NASDAQ:VRM) registered a massive decline of 46.5 per cent and closed at US$ 3.25 per share. The decline in the stock price came as investors responded negatively to the company's financial results for the fourth quarter and fiscal 2021.
During the trading session on Tuesday, March 1, the Vroom stock had declined to an all-time low of US$ 3.2 per share before finally settling at US$ 3.25 apiece at market close.
Key highlights of Vroom's financial performance
In Q4 2021, Vroom reported its net loss per share at US$ 0.94, which was reportedly much more than analysts' estimates of US$ 0.77 per share. Meanwhile, in Q4 2020, Vroom's net loss per share was US$ 0.44.
It is important to note that investors appeared to respond negatively to the latest financial results despite its revenue surge.
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In Q4 2021, Vroom's total revenue increased 130.3 per cent year-over-year (YoY) to US$ 934.5 million. The e-commerce car platform reportedly beat analysts' estimate of US$ 902 million.
Vroom is one of the leading e-commerce platforms for buying and selling used vehicles, and it said that it sold 21,243 e-commerce units, representing an increase of 93 per cent YoY.
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The revenue from the e-commerce platform jumped 159 per cent YoY to US$ 738.7 million. Meanwhile, for fiscal 2021, it was up 167 per cent YoY to US$ 2,442.4 million.
Bottom line
It appears that investors got skeptical due to the company's announcement of a bleaker than expected revenue outlook in the first quarter of 2022. Vroom expects its Q1 revenue to be US$ 875 million, and it is reportedly lower than the estimates of approximately US$ 1.04 billion.
The online car platform expects its e-commerce unit sales to be between 18,000 to 19,000 and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of a negative US$ 130 billion.
Vroom is looking to expand, and on February 1, it announced that it completed the acquisition of United Auto Credit Corporation (UACC), one of the leading automotive finance platforms.
The online car platforms expect to establish a captive finance arm through the acquisition deal as it may help Vroom increase sales and improve unit economics.
Vroom will welcome 500 UACC employees as part of the deal, and these employees will continue to operate and expand the company's third-party finance business.
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Despite surging revenues, the stock performance of Vroom appears to be poor. The VRM stock declined about 70 per cent year-to-date and 76.5 per cent in the last three months.
Please note, the above content constitutes a very preliminary observation or view based on digital trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
