VRM Stock: Why Online Auto Retailer Vroom Is Crashing Today

Vroom (NASDAQ:VRM) stock is taking a beating on Thursday after the online seller of used cars reported results for the fourth quarter of 2020.

Vroom (VRM) app open on a smartphone against a black background.Source: Lori Butcher / Shutterstock.com

The negative news for VRM stock starts with adjusted losses per share of 44 cents. That misses Wall Street’s adjusted per-share loss estimate of 39 cents for the quarter. It’s also a wider loss than the 33 cents per share reported during the same time last year.

Moving on to revenue, Vroom reported $405.83 million for the fourth quarter of the year. Luckily, that’s has it beating out analysts’ estimate of $401.2 million. It’s also a nice boost over the $355.59 million reported in Q4 2019.

Paul Hennessy, CEO of Vroom, said the following in the earnings report.

“Vroom had a strong fourth quarter, with significant year-over-year growth in our ecommerce business. Inventory and marketing are scaling as planned, which is increasing the velocity of the Vroom flywheel, driving conversion and increased sales and revenues.”

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Just like its Q4 earnings, Vroom’s outlook for the first quarter of 2021 is a mixed bag. The company is expecting losses per share between 61 cents and 68 cents on revenue ranging from $500 to $529 million. Wall Street’s estimates call for losses per share of 39 cents on revenue of $509.93 million. Investors in VRM stock aren’t happy with this outlook based on today’s stock movement.

VRM stock was down 24.4% as of Thursday morning and are down 16.9% since the start of the year.

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.

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