02-23-2022, 08:08 PM
CarLotz ($LOTZ) is oversold, and will be the next Carvana
<!-- SC_OFF --><div class="md"><p>This company has huge potential and I think a lot of investors are sleeping on it.</p> <p><strong>What is CarLotz? ($LOTZ)</strong><br/> <em>(from Yahoo Finance) CarLotz is a used vehicle consignment and Retail Remarketing™ business that provides our corporate vehicle sourcing partners and retail sellers of used vehicles with the ability to access the previously unavailable retail sales channel, while simultaneously providing buyers with prices that are, on average, below those of traditional dealerships. Our mission is to create the world's greatest vehicle buying and selling experience. We operate a technology-enabled buying, sourcing, and selling model that offers a seamless omnichannel experience and comprehensive selection of vehicles, while allowing for a fully contactless end-to-end e-commerce interface that enables no-hassle buying and selling.</em></p> <p><em>Our proprietary Retail Remarketing™ technology provides our corporate vehicle sourcing partners with real-time performance metrics and data analytics, along with custom business intelligence reporting that enables price and vehicle triage optimization between the wholesale and retail channels. Through our marketplace model, we generate significant value for both sellers and buyers through price, selection, and experience.</em></p> <p><strong>TL;DR:</strong> They provide distribution hubs where corporate fleets and other sellers can consign their used vehicles, cutting out traditional dealer network/wholesale channel middlemen and therefore being able to both pay more to the sellers and offer cheaper prices to buyers, while keeping their own overhead super low because they don't buy the cars to hold as inventory.</p> <p>So let's talk about it.</p> <p><strong>Revenue Growth Monster</strong></p> <p>CarLotz has absolutely obliterated its earnings over and over again. And I mean just curbstomped them for the last 4 quarters in a row. But don't take my word for it. <a href="https://finance.yahoo.com/news/carlotz-announces-third-quarter-2021-210100062.html">Check it for yourself.</a></p> <p>Highlights from the linked report:<br/> - Record third quarter revenue of $68 million, representing 128% year over year revenue growth<br/> - 58% increase in retail unit sales, despite substantial inventory/supply issues from chip shortage<br/> - 190% increase in finance and insurance revenue<br/> - more than doubled their number of distribution hubs</p> <p>Consensus analyst estimate for 1y price is $7.50. From today's price, that represents 324% upside.</p> <p>Outside simple revenue growth, <a href="https://gyazo.com/c067c88dfe594cb281b3cff192855569">they're best in class in a number of metrics.</a></p> <p>But we can't let new upstart industry disruptors just steal market share and innovate without consequences right?</p> <p><strong>Here come the shorts again.</strong></p> <p>This is a brand new business model, and this means they're a huge threat to the established used car dealers. And guess what? <strong><em>They're shorted to absolute shit as a result.</em></strong> Established dealers (especially primary competitor Carvana ($CVNA)) want CarLotz to die in the cradle, and the best way to do that is to drive its share price into the ground so that one of the big dogs can scoop it up at a severe discount. <a href="https://gyazo.com/6262369ec957e017f02353f730f8756f">And that's exactly what we're seeing.</a></p> <p>Go figure. All the short interest is happening in dark pools off-exchange. 66% short volume is massive. And it suggests that the shorts aren't from retail investors, but it's all the usual market manipulators.</p> <p>$LOTZ's share price has tanked HARD for the last year, from a 52-week high of $10.85 down to only $1.78 as of today. The only headwind against them has been the chip shortage, which they admitted was causing some inventory and supply issues. But that's been affecting every car dealer. </p> <p>For more quick proof that $LOTZ is way oversold, compare quarterly revenues vs. market cap with $CVNA. Third quarter revenue for Carvana was $3.9 billion. Proportionally to their $21b market cap, that's roughly 19% (for the crayon eaters, that means it takes roughly 5 quarters to generate revenue equal to the company's market cap).</p> <p>$LOTZ's $68 million quarterly revenue compared to their $200m market cap is 34%, <strong><em>meaning they generate revenue equal to their company's current market cap every 3 quarters.</em></strong> That is <em>nuts</em>, especially for a brand-new start-up. If $LOTZ's share price were to match the ratio $CVNA has, their market cap would be $340 million, a 70% upside from current prices. And that's great, but that's also ignoring the simple truth that new companies often trade at a higher multiple because of future growth prospects further juicing prices. So it makes even <em>less sense</em> that share price is performing so poorly.</p> <p>Until you add back in the market manipulation.</p> <p><strong>If you buy CarLotz now, and it eventually hits Carvana's current market cap ($21 billion) which is totally plausible, you'll have a 100-bagger. 10,000% growth.</strong></p> <p>See you on the other side of a 1000%+ return. It's only a matter of when, not if.</p> <p><strong>TL;DR - Buy CarLotz.</strong></p> <p>My positions:<br/> 36,400 shares of $LOTZ (avg. cost basis $3.10)<br/> 100 Jan 20 '23 $2.50c</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/WhatHeSaidVO"> /u/WhatHeSaidVO </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/szmyxa/carlotz_lotz_is_oversold_and_will_be_the_next/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/szmyxa/carlotz_lotz_is_oversold_and_will_be_the_next/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>This company has huge potential and I think a lot of investors are sleeping on it.</p> <p><strong>What is CarLotz? ($LOTZ)</strong><br/> <em>(from Yahoo Finance) CarLotz is a used vehicle consignment and Retail Remarketing™ business that provides our corporate vehicle sourcing partners and retail sellers of used vehicles with the ability to access the previously unavailable retail sales channel, while simultaneously providing buyers with prices that are, on average, below those of traditional dealerships. Our mission is to create the world's greatest vehicle buying and selling experience. We operate a technology-enabled buying, sourcing, and selling model that offers a seamless omnichannel experience and comprehensive selection of vehicles, while allowing for a fully contactless end-to-end e-commerce interface that enables no-hassle buying and selling.</em></p> <p><em>Our proprietary Retail Remarketing™ technology provides our corporate vehicle sourcing partners with real-time performance metrics and data analytics, along with custom business intelligence reporting that enables price and vehicle triage optimization between the wholesale and retail channels. Through our marketplace model, we generate significant value for both sellers and buyers through price, selection, and experience.</em></p> <p><strong>TL;DR:</strong> They provide distribution hubs where corporate fleets and other sellers can consign their used vehicles, cutting out traditional dealer network/wholesale channel middlemen and therefore being able to both pay more to the sellers and offer cheaper prices to buyers, while keeping their own overhead super low because they don't buy the cars to hold as inventory.</p> <p>So let's talk about it.</p> <p><strong>Revenue Growth Monster</strong></p> <p>CarLotz has absolutely obliterated its earnings over and over again. And I mean just curbstomped them for the last 4 quarters in a row. But don't take my word for it. <a href="https://finance.yahoo.com/news/carlotz-announces-third-quarter-2021-210100062.html">Check it for yourself.</a></p> <p>Highlights from the linked report:<br/> - Record third quarter revenue of $68 million, representing 128% year over year revenue growth<br/> - 58% increase in retail unit sales, despite substantial inventory/supply issues from chip shortage<br/> - 190% increase in finance and insurance revenue<br/> - more than doubled their number of distribution hubs</p> <p>Consensus analyst estimate for 1y price is $7.50. From today's price, that represents 324% upside.</p> <p>Outside simple revenue growth, <a href="https://gyazo.com/c067c88dfe594cb281b3cff192855569">they're best in class in a number of metrics.</a></p> <p>But we can't let new upstart industry disruptors just steal market share and innovate without consequences right?</p> <p><strong>Here come the shorts again.</strong></p> <p>This is a brand new business model, and this means they're a huge threat to the established used car dealers. And guess what? <strong><em>They're shorted to absolute shit as a result.</em></strong> Established dealers (especially primary competitor Carvana ($CVNA)) want CarLotz to die in the cradle, and the best way to do that is to drive its share price into the ground so that one of the big dogs can scoop it up at a severe discount. <a href="https://gyazo.com/6262369ec957e017f02353f730f8756f">And that's exactly what we're seeing.</a></p> <p>Go figure. All the short interest is happening in dark pools off-exchange. 66% short volume is massive. And it suggests that the shorts aren't from retail investors, but it's all the usual market manipulators.</p> <p>$LOTZ's share price has tanked HARD for the last year, from a 52-week high of $10.85 down to only $1.78 as of today. The only headwind against them has been the chip shortage, which they admitted was causing some inventory and supply issues. But that's been affecting every car dealer. </p> <p>For more quick proof that $LOTZ is way oversold, compare quarterly revenues vs. market cap with $CVNA. Third quarter revenue for Carvana was $3.9 billion. Proportionally to their $21b market cap, that's roughly 19% (for the crayon eaters, that means it takes roughly 5 quarters to generate revenue equal to the company's market cap).</p> <p>$LOTZ's $68 million quarterly revenue compared to their $200m market cap is 34%, <strong><em>meaning they generate revenue equal to their company's current market cap every 3 quarters.</em></strong> That is <em>nuts</em>, especially for a brand-new start-up. If $LOTZ's share price were to match the ratio $CVNA has, their market cap would be $340 million, a 70% upside from current prices. And that's great, but that's also ignoring the simple truth that new companies often trade at a higher multiple because of future growth prospects further juicing prices. So it makes even <em>less sense</em> that share price is performing so poorly.</p> <p>Until you add back in the market manipulation.</p> <p><strong>If you buy CarLotz now, and it eventually hits Carvana's current market cap ($21 billion) which is totally plausible, you'll have a 100-bagger. 10,000% growth.</strong></p> <p>See you on the other side of a 1000%+ return. It's only a matter of when, not if.</p> <p><strong>TL;DR - Buy CarLotz.</strong></p> <p>My positions:<br/> 36,400 shares of $LOTZ (avg. cost basis $3.10)<br/> 100 Jan 20 '23 $2.50c</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/WhatHeSaidVO"> /u/WhatHeSaidVO </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/szmyxa/carlotz_lotz_is_oversold_and_will_be_the_next/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/szmyxa/carlotz_lotz_is_oversold_and_will_be_the_next/">[comments]</a></span>Kind Regards R