Car-trading platform Vroom (NASDAQ:VRM) is in the midst of a massive pullback. Indeed, VRM stock is down a massive 40% today after disappointing investors at its earnings call yesterday. VRM is trending around its all-time low today after suffering a brutal selloff.
What do you need to know about Vroom’s brutal downturn today?
Well, on Monday afternoon Vroom released its quarterly earnings report for Q4 2021. VRM reported a loss of -94 cents per share, which is much lower than estimates of -77 cents. Additionally, this is more than double the -44 cent loss per share the company reported a year prior. With that said, the e-commerce platform managed to slightly beat revenue estimates, posting $934.49 million in sales compared to estimated $902 million.
So, what’s behind VRM’s big drop today?
Investors are likely spooked by Vroom’s bleaker than expected first-quarter revenue outlook. Citing lower margins due to labor shortages and reduced demand, Vroom expects Q1 revenue of roughly $875 million. This is far below Q1 estimates, which were around $1.04 billion.
With VRM posting a new low, many investors are wondering if now is the time to jump into the company. Let’s see what the experts think about VRM today.
3 Analysts Weigh In on VRM Stock
Truist Securities analyst Naved Khan was clearly disappointed by Vroom’s earnings call. Khan downgraded Vroom from “buy” to “hold” and set a price target of $11. However, all things considered, that is still quite a bit over its current $3.54 price point.
Wells Fargo analyst Zachary Fadem clearly feels similarly about Vroom’s financial results. Fadem downgraded VRM to “equal weight” from its previous “overweight” rating. Citing industry-wide growth concerns, Fadem set a price target of $6 per share.
Finally, the six-analyst panel at TipRanks set an average 12-month price target of $13.80 for VRM. With three buy ratings and three hold ratings, TipRanks views VRM as a “moderate buy.”
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
