William Blair & Company initiated research coverage of Vroom, Inc. (VRM $54.19), a rapidly growing digital used car retail platform combining a transparent, customer-friendly offer with a vertically integrated, asset-light approach.
Analyst Sharon Zackfia estimates the company can reach full-year profitability by 2022 and noted Vroom has grown revenues rapidly to roughly $1.2 billion last year.
“In an industry ripe for innovation, Vroom offers a customer-friendly, frictionless digital consumer buying and/or selling experience,” Zackfia said. “The consumer appeal of Vroom’s proposition and its successful execution is illustrated by its rapid growth in e-commerce sales, with units sold more than doubling in each of the last 10 months through April subsequent to the launch of the company’s first national ad campaign in February 2019. Still, Vroom’s low-20% aided brand awareness remains well below peers, suggesting potential for meaningful upside. As we have seen already, companies that successfully execute transparent, customer-friendly brands against the fragmented competitive backdrop of the massive used car marketplace can drive strong market share gains for prolonged periods, with a potential pandemic-related acceleration in consumer adoption of auto e-commerce a key positive for Vroom.”
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