Shares of Vroom Inc. (NASDAQ: VRM) were up 4.5% on Thursday. The stock has dropped 13% since the beginning of this year. The company reported better-than-expected results for the first quarter of 2021 a day ago and believes it is well-positioned to achieve a strong growth in gross profits for the full year.
Total revenue increased 57% year-over-year to $591.1 million, surpassing estimates. Ecommerce revenue rose 81% to $422.3 million, driven by double-digit growth in ecommerce vehicle and product revenue, helped in turn by an increase in ecommerce units sold. Vroom reported a net loss of $0.57 per share which was narrower than expected.
Vroom is upbeat about the level of demand in the marketplace and the company is seeing more customers use its platform to both buy and sell cars. The company is confident that this high level of demand will generate significant growth in the second quarter of 2021.
The shortage of microchips and delays in the manufacturing of new cars have driven up the demand for used vehicles while creating pressure on supply and pricing. Vroom remains well-positioned to acquire vehicles from consumers as the supply of used vehicles remains constrained and wholesale pricing remains high in traditional channels. In Q1, the company purchased 54% of the vehicles it retailed from consumers.
Vroom continues to invest in supply and is working on increasing the number of reconditioning facilities as well as overall capacity. During the first quarter, the company added five third-party reconditioning facilities bringing the total to 24 and also expanded its capacity at many of its existing facilities.
Vroom is seeing strong demand and ecommerce sales along with improvements in inventory and unit economics. This, combined with increasing capacity and rising sales, give it confidence that it can deliver triple-digit ecommerce unit growth and over 200% aggregate gross profit growth in 2021.
Vroom expects to generate total revenue of $618-640 million along with gross profit of $54-59 million in the second quarter of 2021. Net loss is expected to range between $0.58-0.51 per share. Ecommerce unit sales are estimated to range between 17,500 and 18,000, implying a year-over-year growth of 164% at the mid-point.
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