![]() ![]() In a nutshell, Shift's marketing strategy is working very well. As we have discussed before, Carvana adopted such a marketing program, and Shift is simply following in the footsteps of a very successful business in its industry.Īccording to Q3 results, Shift's customer acquisition costs continue to decline, while unit sales growth remains very strong. In Q3, Shift added Houston to its growing list of acquisition markets.Īs Shift scales nationwide, the company's new marketing program (focused on creating long-term brand recognition instead of the digital ad-based sales strategy of the past) makes a lot more sense. After establishing its presence on the west coast, Shift is moving aggressively with its expansion plan in Texas and Nevada. Shift is one of those "regional to national expansion" stories that are easy to see from a distance due to an easily replicable playbook and a precedent set by industry leader - Carvana ( CVNA). Hence, Shift is holding nearly ~2x last year's inventory, i.e., more options for customers to choose from. We will learn more when we get to customer acquisition cost data but for now, let's keep going.Īt the end of Q3, Shift had 3,593 vehicles listed for sale on its website, up from 1,840 vehicles last year. I believe this changing trend is an indicator of higher marketing efficiency stemming out of Shift's nationwide brand marketing strategy. On the other hand, the sales data indicates higher sales conversion. Looking at some non-financial data, we can see that Shift's average monthly unique visitors grew to 534K (up 40.9% y/y), which indicates slower website traffic growth. On the back of strong price appreciation in the latter half of Q3, Shift achieved a gross profit of ~$2000 per vehicle (well ahead of its guidance).ĭuring Q3, Shift sourced 95% of its e-commerce units directly from consumers and partners (i.e., it's still not buying much from the wholesale auctions market, which the company indicated remains very expensive). These results were achieved through a combination of rapid growth in e-commerce vehicle sales and a significant jump in average selling prices (up ~45% y/y). Riding high on continued strength in the used-car industry, Shift generated record revenues of ~$180M (up 200% y/y) in Q3 2021. ![]() So, let's begin dissecting Shift's Q3 results. However, I would like to share my analysis of Shift's quarter with you today and explain my bullish stance on the company.įor those of you who haven't had the chance to go over our research on Shift yet, I would recommend the following note here. Now, the market will do what it wants to do. I'm providing this note as a follow-up to multiple questions on my previous Shift article. LazingBee/iStock via Getty Images Introductionĭespite posting yet another blowout quarterly report in November, Shift's ( NASDAQ: SFT) stock has continued sliding lower, now trading below ~$3, implying a fully-diluted market cap of just ~$250M (~1x the cash on its balance sheet). ![]()
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