An Analyst’s Insight
Wedbush analyst Seth Basham restated an Outperform rating on the shares of RumbleON Inc (NASDAQ:RMBL) and adjusted the price target from $7.50 to $7.
Revenue Performance and Strategic Outlook
RumbleON reported fourth-quarter revenue of $311.1 million, a 6.2% decrease year-over-year, falling short of the analyst consensus of $339.48 million.
While the results lagged behind expectations on multiple fronts, the company withdrew its 2024 forecast, introducing a three-year plan to enhance sales and margins.
Long-Term Strategy
Looking ahead, CEO Mike Kennedy unveiled a “Vision 2026” blueprint aiming for revenue of at least $1.7 billion by 2026 and EBITDA of $150 million.
To achieve these goals, the company will focus on scaling operations nationally, optimizing its cash offer tool for dealerships, and ensuring prudent capital allocation.
Financial Stability and Operational Efficiency
Even amidst challenges, RumbleON’s non-vehicle net debt to EBITDA ratio improved to 4.3x in the early first quarter following strategic debt reduction.
The analyst highlighted effective cost management and improved balance sheet flexibility as positive indicators for the company.
Current Scenario and Future Outlook
While recognizing the persisting demand obstacles in the short term, the analyst remains cautious about immediate upside potential.
However, considering the company’s ambitious, yet viable targets for the long run, a rebound in unit demand and resolution of GPU-related challenges could pave the way for success.
As of the latest update on Friday, RMBL shares were up by 10.20% at $5.51.