Vroom Inc. (VRM): Technicals Say You should Hold

Vroom Inc. (NASDAQ:VRM) saw an upside of 2.48% to close Tuesday at $21.07 after adding $0.51 on the day. The 5-day average trading volume is 1,474,840 shares of the company’s common stock. It has gained $22.18 in the past week. An average of 1,931,730 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 2,087,798.

VRM’s 1-month performance is -18.55% or -$5.39 on its low of $19.80 reached on 10/06/21. The company’s shares have touched a 52-week low of $19.80 and high of $53.33, with the stock’s rally to the 52-week high happening on 02/16/21. YTD, VRM has lost -48.57% or -$19.90. However, the current price is down -60.49%% from the 52-week high price.

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Insider Transactions

On Sep 15, 28 days have gone by since the last insider trading activity for Vroom Inc. (VRM). Stott Carol Denise (Chief People & Culture Officer) most recently sold 15,000 shares at $24.45 per share on Sep 15. This transaction cost the insider $366,726. Chief Executive Officer, Hennessy Paul J., sold 49,600 shares at a price of $44.11 on Jun 25. Then, on Jun 23, Chief Executive Officer Hennessy Paul J. sold 400 shares at a price of $44.02 per share. This transaction amounted to $17,606.

Valuation Metrics

Vroom Inc. (VRM) has a trailing price-to-earnings (P/E) ratio of 15.45 for the broader industry and 30.86 for the sector.VRM stock has a beta of 0.00. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 1.38 while the price-to-book (PB) in the most recent quarter is 2.53.

Vroom Inc.’s quick ratio for the period ended June 29 was 2.50, with the current ratio over the same period at 3.30 meaning that VRM stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.54, while the total debt to equity was 0.86. In terms of profitability, the gross margin trailing 12 months is 7.00%. The trailing 12-month EBITDA margin is -12.81% while for the period ending June 29; Vroom Inc.’s operating margin was -11.30%. The firm’s gross profit as reported stood at $71.55 million against revenue of $1.36 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Net income and sales went up compared to those figures reported in the previous quarter. Analysts expected VRM to announce -$0.49 per share in earnings in its latest quarter, but it posted -$0.48, representing a 2.00% surprise. EBITDA for the quarter stood at more than -$60.29 million. VRM stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 1.28 billion, with total debt at $991.53 million. Shareholders hold equity totaling $136.72 million

Technical Picture

Let’s look briefly at Vroom Inc. (VRM) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 12 October was 35.24% to suggest the stock is trending Neutral, with historical volatility in this time period at 39.96%.

The stock’s 5-day moving average is $21.07, reflecting a +2.78% or $0.57 change from its current price. VRM is currently trading -14.31% above its 20-day SMA, -51.45% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by -43.39% and -50.87% respectively.

Stochastic %K and %D was 21.39% and 23.39% and the average true range (ATR) pointed at 1.09. The RSI (14) points at 33.23%, while the 14-day stochastic is at 23.08% with the period’s ATR at 1.15. The stock’s 9-day MACD Oscillator is pointing at -0.18 and -1.21 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Vroom Inc. (NASDAQ: VRM), Piper Sandler downgraded it to a Neutral rating. They previously had an Overweight rating on the stock. Analysts offering their rating for VRM stock have a consensus rating for the stock as Overweight. Currently, 1 brokerage advisors rate VRM as a “sell,”, while 4 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 2 rates the stock as overweight while 8 have offered a “buy” rating.

What is VRM’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $30.00 and a high of $65.00, with their median price target at $48.50. Looking at these predictions, the average price target given by analysts is for Vroom Inc. (VRM) stock is $48.00.


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