Vroom Inc (NASDAQ:VRM) is an innovative company which operates its own digital car purchasing platform. That being said, experts believe that it is a stock that may not be the wisest move for cautious investors at this point despite the fact that e-commerce has grown at a breakneck pace.
Trading Data
On Thursday, VRM stock fell 3.66% to $2 with more than 9.67 million shares traded, compared to its average volume of 11.05 million shares. The stock moved within a range of $1.9600 – 2.1000 after opening trading at $2.08.
Major Trigger
The rationale in favour of the stock is understandable considering the fact that e-commerce as a sector has been on a remarkable run since the beginning of the COVID 19 pandemic and on top of that, the stock appears cheap as well. However, the stock is cheap for good reason and it may be a good move to take a close look.
One of the major reasons behind the negative sentiments about the stock among investors is the fact that the company’s losses have continued to widen despite the continued rise in revenues.
In 2019, the company made losses of $143 million and in 2020 it soared to $203 million. In 2021, the losses ballooned to a staggering $371 million. The losses have gone up at a remarkable rate and hence, it may be difficult for investors to see any return on investment on this stock at this point.
Technical Data
VRM stock is trading below the 20-Day and 200-Day Moving averages of $2.63 and $4.08 respectively. Moreover, the stock is trading below the 50-Day moving average of $17.53.
