Average selling price increased to $22,090 which is 47% improvement YoY. The company recorded 120% GPU improvement since January 2021, as in the last quarter GPU reached to $2,781. The huge revenue growth comes from unit volume increases and from significant GPU improvement. Analysts expected just $129.4 million revenue for the second quarter, while the company was able to record significant revenue surprise of 19.67%. Meanwhile revenue grew by 377% YoY reaching $155 million level. The number is 2.7 times higher than pre-pandemic high of 2,181 recorded in Q3 2019. In the last quarter Shift was able to record 222% growth of vehicles sold, selling 5,871 vehicles. If we calculate the targeted TAM of the company, we get $402 billion total addressable market, where the company has just achieved $380.6 million sales (0.09% market share).ĭue to its right policy the company is recording significant growth. At the same time the company is intended to offer vehicles at lower price than $20,000, which represents 57% of total market. The company targets to sell used cars aged 3-10 years, which represent almost 84% of total used car market in the USA. Shift Technologies has a specific target market which differentiates its service from others. If a consumer wants to make a test drive, then the company organises test-drive wherever a consumer wants. The company provides 150+ point inspection, which increases confidence towards the cars it sells and gives a buyer clear and detailed picture about the car he wants to purchase. The large inventory helps each consumer to find a vehicle, which corresponds to his preferences. Shift Technologies facilitates car buying experience as it possesses inventory of thousands of used vehicles. It is estimated that before acquiring a car 97% of buyers make online research, while 82% of consumers use online 3rd party site for car shopping. Generally people are getting more inclined towards e-commerce channels and make online research before buying goods. In 2019 total used car market has recorded $841 billion sales, where 50% were peer-to-peer sales, and only 6% came from Top 100 dealers. It is estimated that e-commerce players have more than 32% penetration in apparel industry, 28% in furniture industry, 21% in pet supply industry while their penetration is only 1-2% in used vehicle market. Despite the fact that in lots of industries online buying has recorded significant penetration, in used car market, it has too low penetration yet. Relative and DCF valuation analyses indicate that the stock is significantly undervalued which is why we assign Strong Buy rating to the stock.Į-commerce penetrates into every industry and grabs significant market share from traditional brick-and-mortar retailers. The company grows at a triple-digit rate, improving both volume and GPU. Shift Technologies ( NASDAQ: SFT) has huge growth potential as its market share in its TAM is less than 0.1%.
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