Shares of Cazoo (NYSE:CZOO) soared higher by as much as 200% after the company reported its second quarter and first half of the year results. Cazoo debuted on the public market last August through a special purpose acquisition company (SPAC) merger at more than $9 per share. Today, CZOO stock is trading in the $1 range.
During Q2, the British online car retailer posted revenue of 333 million pounds, up 145% year-over-year (YOY). Meanwhile, vehicles sold were up 124% YOY to 23,955.
Cazoo also announced that Paul Woolf was appointed as its new CFO. Woolf will begin his duties during the fourth quarter.
“I am very proud of what we have accomplished so far in 2022 as we continue to transform the car buying and selling experience for consumers,” explained CEO Alex Chesterman. “We achieved record revenues and retail unit sales in Q2 and grew our market share significantly, despite the tough macroeconomic backdrop, as the consumer shift towards online car buying continues to accelerate.”
Let’s get into the details of the results.
CZOO Stock Soars on Exceptional Earnings
Cazoo is planning on reducing its cash burn in mainland Europe and “materially reducing additional funding requirement.” The company ended the quarter with over 400 million pounds of cash on hand and 175 million pounds of self-financed inventory. Currently, CZOO stock’s market capitalization is hovering near the $1 billion range.
Chesterman added that the company has sold more than 80,000 retail units online, of which 30,000 were sold during the first half of the year. Now, the company is focused on maintaining a strong balance sheet and preserving cash.
In July, Cazoo posted record retail unit sales and revenues. The company also reiterated its full year guidance for revenue growth between 110% and 125%. Furthermore, Cazoo expects total retail units sold for 2022 to be between 70,000 and 80,000. Finally, it expects to have cash and cash equivalents of 250 million pounds by year end.
Management expects strong future growth. The U.K. boasts Europe’s largest used car market. On average, the country incurs 8 million transactions annually, which amounts to more than 100 billion pounds. However, digital penetration for used cars is still small. Cazoo ultimately has a goal of capturing 5% of the used car market in the long run.
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On the date of publication, Eddie Pan 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.