Vroom Slumps After-Hours Despite Q3 Beats

Vroom topped analyst revenue estimates while also posting a narrower-than-expected loss.
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Shares of online car selling platform Vroom Inc.  (VRM) - Get Report dropped sharply after-hours Wednesday despite the company reporting third-quarter results that topped analyst estimates. 

The New York-based e-commerce company reported Q3 revenue of $323 million with a net loss of 29 cents per share. Analysts were expecting revenue of $310.61 million and a net loss of 37 cents per share. 

“I am very pleased with our results for the third quarter, in which we successfully managed the challenges presented by the COVID-19 pandemic, outperformed our plan, demonstrated the strength of our business model, and hit the accelerator on significantly scaling our business," said CEO Paul Hennessy in a statement. 

Despite this, Vroom shares were falling 10.8% to $36.40 after hours Wednesday. 

The company issued cautious third quarter guidance in August while announcing plans to accelerate its shift towards the sale of lower-priced cars amid changes in demand owing to the pandemic.

Vroom said then that it expected Q3 revenue between $268 million and $290 million, while analyst had been expecting revenue of $344.6 million. 

However, the company now says that consumer demand for used vehicles has returned to pre-COVID 19 levels. 

"We will continue to execute our plan and invest in the growth of our business as we transform the market for buying and selling used vehicles," Hennessy said. 

Vroom shares closed the regular day's trading up 6.56% to $40.80. Year to date, the stock is down nearly 40%.