Shift Technologies’ 1Q Sales Outlook Tops Estimates After 4Q Beat; Shares Pop 10%

Shift Technologies forecasted better-than-expected sales in the first quarter after results topped consensus estimates in 4Q. Shares of the end-to-end auto e-commerce platform jumped 9.4% in Monday’s extended trading session after closing 4.1% lower on the day.

Shift Technologies (SFT) reported a 4Q net loss of $0.07 per share, compared to the loss of $6.51 per share during the same quarter last year. Analysts had expected the company to report a loss of $0.42 per share.

Revenues surged 168% year-over-year to $73.4 million and outpaced the consensus estimate of $73 million. The outstanding performance was driven by a 147% rise in total units sold during the quarter.

The company’s adjusted gross profit per unit (GPU) was $514 in the quarter, up 53% year-over-year. Adjusted EBITDA came in at a loss of $28.9 million, compared to a loss of $12.8 million in the prior-year quarter.

Shift Technologies CFO Cindy Hanford commented, “We expect 2021 to be a big year for strategic milestones, continued revenue growth and improving unit economics as we scale the business.”

For 2021, the company projects revenue to exceed $450 million, versus analysts’ expectations of $392.07 million. Adjusted GPU is expected to be greater than $1,600 per e-commerce unit.

For the first quarter of 2021, revenue is expected to be between $90 million and $95 million, versus the consensus estimate of $72.6 million. Adjusted GPU is forecasted to be in the range of $1,200 – $1,350. (See Shift Technologies stock analysis on TipRanks)

Following the 4Q results, Wells Fargo analyst Zachary Fadem reiterated a Buy rating and a price target of $12 (56.3% upside potential) on the stock. “While SFT’s Q4 print featured several puts/takes,” the analyst sees “a favorable outcome considering modest topline upside, a better-than-expected Q1/FY21 outlook and clear evidence that SFT is moving past COVID-driven execution hurdles.”

Wall Street analysts are bullish about the stock. The Strong Buy consensus rating boasts 3 Buy ratings versus 1 Hold rating. Looking ahead, the average analyst price target stands at $16.50, putting the upside potential at almost 115% over the next 12 months.

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