Vroom Earnings Report: Turbocharged by Connected Economy?

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Online, increasingly, is where the rubber meets the road.

Vroom will report earnings on Wednesday (May 12) and likely will show that the connected economy is continuing to transform the way we buy cars.

In a nutshell, pricing is up, supply is down and consumers are flush with cash. This might bode well for Vroom, where consensus holds a $518 million revenue estimate compared to $375 million last year. However, it should be noted that the growth rate would be signed off of the $405 million seen in the fourth quarter of last year. They expect a loss of 63 cents a share in this most recent quarter.

Back then, as noted in this space, management stated that demand outstripped capacity. And 2021 guidance anticipates that dynamic sticking firmly in place — eCommerce sales should be up about 80 percent in the year, factoring in the midpoint of 14,000 to 15,000 units. To get a sense of how that translates into eCommerce-related revenue momentum, that metric was up more than 40 percent in the latest quarter.

It’ll be worth seeing if the economic recovery and vaccinations have been bringing traffic to the TDA physical locations. As reported in the latest quarter, total units sold in this channel were 1,777, down more than 50 percent year over year, and revenues were off nearly 58 percent.

Last Mile Efforts, Too 

Last-mile efforts will continue to be in focus, as the company has been building out its logistics operations. At the end of last quarter, the firm operated eight hubs, a tally that should expand to 30 by the end of this year, and which could account for about 50 percent of eCommerce sales.

As JD Powers noted last month, the dynamics seem favorable for firms that make their top lines selling vehicles, as a tight supply has been driving wholesale prices up 26 percent. Retail sales have surged high single-digit percentage points. Vroom’s CEO Paul Hennessy told Karen Webster in a recent conversation that “we’re seeing an evolution [in the used car buying space], and it starts with a customer-centric philosophy built on top of an eCommerce platform.

“It has to be customer-led, and then the infrastructure must be built on top of an experimentation and data platform. And if you don’t do those two things, it’s really hard to understand what’s working well and what isn’t,” he said.

Wednesday will give us some granular insight into what has changed amid the great digital shift — and what the (literal) road looks like ahead.

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