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Vroom Posts Stronger-Than-Expected Earnings, Shares Jump

Vroom's revenue totaled $591.1 million in the first quarter, soaring 57% from last year.
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Vroom  (VRM) - Get Report shares rose sharply in after-hours trading Wednesday, after the online used car seller reported stronger-than-expected earnings for the first quarter.

Revenue totaled $591.118 million, up a whopping 57% from $375.772 million last year. The FactSet analyst consensus called for $517.2 million in the latest quarter.

Consumer demand for cars and online purchases has exploded during the pandemic.

Vroom reported a net loss of $77.19 million, or 57 cents a share, in the first quarter, compared to a loss of $41.06 million, or $4.85 a share, a year ago. The analyst consensus called for a loss of 63 cents in the latest quarter.

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It recently stood at $39.69, up 12.08% in after-hours trading. It has slumped 27% over the past three months, before the after-hours gain, amid concern about valuation and potential profitability.

“Vroom delivered record results in the first quarter of 2021, with total gross profit nearly doubling versus the same period in the prior year, as we delivered exceptional growth and improving unit economics,” said Chief Executive Paul Hennessy.

“We will continue … growing inventory, expanding reconditioning capacity, and investing in logistics and our end-to-end ecommerce experience, among other initiatives.”

In the fourth quarter, Vroom reported a wider-than-expected loss, which led analysts to lower their price targets. Piper Sandler’s Alexander Potter slashed his target to $60 from $75, saying Vroom is becoming a “show me” story.

In December, Vroom announced it’s buying Vast Holdings, the owner of CarStory, which provides AI-powered used car information, for about $120 million.