In today's video I look at fundamentals and valuation metrics for Vroom (VRM 19.10%), Carparts.com (PRTS 5.21%), and Hims & Hers Health (HIMS 0.85%). Each of these stocks dropped more than 5% on Tuesday, and below I share a few highlights from the video on why investors should add them to their watch lists.
Two reasons to add Vroom to your watch list
- Vroom is a growing e-commerce car retailer company that allows users to buy, sell, and trade used vehicles. Vroom reported 81% year-over-year (YOY) e-commerce revenue growth and 95% YOY growth in e-commerce units sold for the first quarter of 2021. The growth story does not end there, as management guides for triple-digit YOY revenue growth for the full year 2021.
- Recent news that could explain the sudden price drop is the recently announced convertible senior note offering, as some investors might not enjoy an increase in debt. Vroom will raise roughly $500 million with the note due 2026. Before the offering, Vroom already has a solid balance sheet with substantially more cash & short-term investments than debt.
Two reasons to add Carparts.com to your watch list
- Carparts.com is a growing e-commerce company that sells car parts products. It reported 65% YOY revenue growth for the first quarter of 2021 and reaffirmed its long-term goal of compounded sales growth between 20% and 25%.
- Carparts.com is in active discussion to expand its distribution center by over 155,000 square feet. The expansion will increase its revenue capacity and allow the company to meet the enormous demand it sees from customers.
Two reasons to add Hims & Hers Health to your watch list
- Hims & Hers Health is a growing telehealth company. It reported 74% YOY revenue growth and roughly 80% YOY subscribers growth for the first quarter of 2021.
- Recently announced plans to acquire Honest Health, a London-based company, could explain the sudden price drop. The acquisition will accelerate Hims & Hers' plans to expand across the United Kingdom and western Europe. Unfortunately, the financial details have not been revealed, which could have some investors worried about how the balance sheet might be affected.
Click the video below for my full thoughts and analysis.
*Stock prices used were the closing prices of June 15, 2021. The video was published on June 15, 2021.