What happened

Shares of CarParts.com (PRTS -4.96%) were falling for the second day in a row today after the company reported third-quarter earnings yesterday. Though the results were actually better than expected, the stock still stumbled, which may have owed more to the broader sell-off in e-commerce stocks on news that Pfizer had found its coronavirus vaccine to be more than 90% effective.

As of 11:31 a.m. EST, CarParts.com shares were down 8.2% after falling 30% yesterday. 

A collection of various car parts

Image source: Getty Images.

So what

Despite the two-day sell-off, CarParts.com shares have exploded this year as the company has benefited from both the surge in e-commerce during the pandemic and increased demand for car parts as used car sales have also boomed as Americans move out of cities and look to avoid public transportation.

Its third-quarter earnings report delivered strong growth again as the company posted 69% revenue growth to $117.4 million, which easily beat expectations at $91.8 million. That growth trickled down the income statement as well, with gross profit doubling to $43.1 million and gross margin improving from 30.5% to 36.7% thanks to favorable shifts in product and channel mix and increased efficiencies in logistics operations. Adjusted EBITDA increased from $1.3 million to $5.1 million, and on the bottom line, the company posted a per-share profit of $0.03, beating a $0.04 per share loss in the quarter a year ago and expectations that the company would break even.

CEO Lev Peker touted the company's momentum, saying, "The investments we made in our technology, marketing and supply chain starting in 2019 enabled us to return to growth and margin expansion beginning in the first quarter of this year and continuing through the third quarter, driving exceptional growth across our business."

Now what

CarParts.com did not provide guidance for the fourth quarter due to uncertainty around the coronavirus pandemic and the greater economy, but the real reason for the sell-off seemed to be a broader backlash against e-commerce stocks after Pfizer released its vaccine update yesterday. CarParts.com shares have gained as much as 600% this year, among a group e-commerce stocks that have been big winners this year like Etsy and Wayfair, which also sold off on the Pfizer news.

Nonetheless, the company looks poised for strong growth over the coming quarters as demand for auto parts remains strong and the coronavirus pandemic is still raging.