Market News

CarLotz Jumps 11% on Upbeat Q3 Results

Used vehicle marketplace operator CarLotz, Inc. (LOTZ) has reported better-than-expected results for the third quarter ended September 30, 2021. The strong results were driven by growth in net revenues.

Following the earnings, shares of the company gained 10.7% to close at $4.33 in Monday’s extended trade.

Revenue & Earnings

CarLotz reported quarterly net revenues of $68 million, which denotes a significant growth from the previous year’s figure of $29.8 million. Further, the figure surpassed the consensus estimate of $55.77 million. Retail vehicle sales and Wholesale vehicle sales were the primary drivers of growth and witnessed year-over-year growth of 110.8% and 330.5%, respectively.

The company reported a quarterly loss per share of $0.03, wider than the loss of $0.01 reported in the prior year. The Street had estimated a loss of $0.20 per share for the third quarter.

Other Operating Metrics

In other operating metrics, the company’s retail unit sales witnessed a growth of 58% from the previous year to 2,490 units.

Notably, retail gross profit per unit (GPU) stood at $939, a de-growth of 57% from the prior year. Adjusted retail GPU, excluding the increase in the inventory reserve, declined 39.7% from the prior-year period and stood at $1,315 at the end of the quarter.

Management Commentary

The CEO of CarLotz, Michael Bor, said, “While the chip shortage has caused a disruption to our consignment business model, we are focused on maximizing returns on the significant investments we have made this year, leveraging the assets we already have in place, and offering the best customer experience in the industry, all while building awareness of the CarLotz brand and what consignment means.”

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Price Target

Recently, Barrington analyst Gary Prestopino reiterated a Buy rating on the stock with a price target of $9, which implies upside potential of 130.2% from current levels.

The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 1 Buy and 2 Holds. The average CarLots price target of $8 implies that the stock has upside potential of 104.6% from current levels. Shares have declined about 61.3% over the past year.

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