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CarParts.com Inc (PRTS)
NASDAQ:PRTS
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CarParts.com Inc
(NASDAQ:PRTS)
46Neutral
Positive Factors
Financial Performance
Gross margin of 35.2% increased 170bps sequentially as the company has begun focusing on higher margin customers.
Strategic Initiatives
The company laid out three initiatives: improve the online and mobile app platforms, optimize the product mix, and invest in marketing.
User Growth
The mobile app reached over 500K downloads which is more than double from the beginning of the year.
Negative Factors
Consumer Behavior
The company has been unfavorably impacted as customers have traded down to lower-quality products or deferred spending on certain auto repairs.
Financial Performance
Shares have been under pressure as financials have deteriorated y/y, and there is little confidence in a rebound in 2024 with the lower revenue guidance.
Revenue Decline
The company faced another quarter of consumer softness and was negatively impacted by its deliberate price increases which drove a 13% y/y decline in revenue.
CarParts.com Inc (PRTS) vs. S&P 500 (SPY)
Market Cap
$47.36M
Dividend YieldN/A
Average Volume (3M)862.25K
Price to Earnings (P/E)―
Beta (1Y)0.54
Revenue Growth-12.86%
EPS Growth-386.01%
CountryUS
Employees1,466
SectorConsumer Cyclical
Sector Strength63
IndustrySpecialty Retail
Share Statistics
EPS (TTM)-0.73
Shares Outstanding58,295,060
10 Day Avg. Volume430,316
30 Day Avg. Volume862,255
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.09
Price to Cash Flow (P/CF)1.60
P/FCF Ratio2.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$0.80Price Target Upside-2.44% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering2
CarParts.com Inc Business Overview & Revenue Model
Company DescriptionCarParts.com, Inc., together with its subsidiaries, operates as an online provider of aftermarket auto parts and accessories in the United States and the Philippines. It offers replacement parts, such as parts for the exterior of an automobile; mirror products; engine and chassis components, as well as other mechanical and electrical parts; and performance parts and accessories to individual consumers through its network of e-commerce websites and online marketplaces. The company also sells auto parts to collision repair shops; markets Kool-Vue products to auto parts wholesale distributors; and aftermarket catalytic converters under the Evan Fischer brand. Its flagship websites include www.carparts.com, www.jcwhitney.com, www.autopartswarehouse.com and www.usautoparts.com. The company was formerly known as U.S. Auto Parts Network, Inc. and changed its name to CarParts.com, Inc. in July 2020. CarParts.com, Inc. was incorporated in 1995 and is headquartered in Torrance, California.
How the Company Makes MoneyCarParts.com Inc generates revenue primarily through the sale of automotive parts and accessories via its e-commerce platform. The company sources products directly from manufacturers and sells them to consumers at competitive prices. Key revenue streams include direct-to-consumer sales of replacement parts, performance parts, and accessories. The company benefits from its strategic partnerships with suppliers and manufacturers, enabling them to offer a wide selection of products while maintaining cost efficiency. Additionally, CarParts.com leverages data analytics to optimize pricing and inventory management, further enhancing its revenue potential.
CarParts.com Inc Financial Statement Overview
Summary
CarParts.com is experiencing significant challenges with declining revenues and profitability, reflected in negative margins and reduced cash flows. Despite eliminating debt and maintaining a strong equity ratio, negative ROE and cash flow issues highlight the need for operational improvements.Income Statement
The company has shown a decline in revenue from $675.7M in 2023 to $588.8M in 2024, equating to a revenue growth rate of -12.9%. Gross profit margin decreased from 33.9% in 2023 to 33.4% in 2024. Net profit margins have also deteriorated, moving further into the negative territory from -1.2% to -6.9%. Additionally, both EBIT and EBITDA margins are negative, indicating operational challenges.45
Neutral
Balance Sheet
The balance sheet reflects a stable equity ratio of 40.4% in 2024, showing solid equity backing. The company has eliminated its debt, improving the debt-to-equity ratio to 0, which reduces financial risk. However, the return on equity (ROE) is negative due to the net loss, indicating challenges in profitability despite a robust capital structure.65
Positive
Cash Flow
The operating cash flow has declined significantly from $50M in 2023 to $10.3M in 2024, indicating reduced cash generation from operations. Free cash flow turned negative at -$10.2M, as capital expenditures exceeded operating cash flows. This highlights concerns around the company's ability to generate sufficient cash to cover investments and operations.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 588.85M | 675.73M | 661.60M | 582.44M | 443.88M | Gross Profit |
| 196.74M | 229.41M | 230.89M | 197.28M | 155.37M | EBIT |
| -40.63M | -9.88M | 1.12M | -8.87M | 508.00K | EBITDA |
| -40.63M | 10.04M | 14.83M | 1.13M | 8.27M | Net Income Common Stockholders |
| -40.60M | -8.22M | -951.00K | -10.34M | -1.51M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 36.40M | 50.95M | 18.77M | 18.14M | 35.80M | Total Assets |
| 210.57M | 257.86M | 238.40M | 235.34M | 186.97M | Total Debt |
| 41.33M | 38.13M | 46.65M | 46.39M | 31.58M | Net Debt |
| -36.40M | -12.82M | 27.89M | 28.25M | -4.22M | Total Liabilities |
| 125.40M | 145.02M | 128.33M | 139.77M | 103.48M | Stockholders Equity |
| 85.17M | 112.83M | 110.07M | 95.57M | 83.49M |
| Cash Flow | Free Cash Flow | |||
| -10.23M | 38.01M | 2.78M | -18.57M | -28.83M | Operating Cash Flow |
| 10.34M | 50.00M | 15.37M | -6.99M | -19.07M | Investing Cash Flow |
| -20.56M | -11.90M | -12.52M | -11.55M | -9.76M | Financing Cash Flow |
| -4.42M | -5.92M | -2.15M | 902.00K | 62.36M |
CarParts.com Inc Technical Analysis
Negative
0.82
Price Trends
1.00
Negative
1.04
Negative
0.98
Negative
Market Momentum
-0.06
Positive
40.24
Neutral
11.18
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRTS, the sentiment is Negative. The current price of 0.82 is below the 20-day moving average (MA) of 0.93, below the 50-day MA of 1.00, and below the 200-day MA of 0.98, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 40.24 is Neutral, neither overbought nor oversold. The STOCH value of 11.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRTS.
CarParts.com Inc Risk Analysis
CarParts.com Inc disclosed 52 risk factors in its most recent earnings report. CarParts.com Inc reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CarParts.com Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $61.57B | 24.36 | -14.95% | ― | 4.72% | 4.69% | |
71 Outperform | $395.93M | 10.20 | 55.70% | 13.45% | 10.45% | 9.32% | |
70 Outperform | $80.95B | 34.38 | -174.09% | ― | 5.67% | 5.40% | |
68 Neutral | $15.99B | 17.81 | 20.69% | 3.47% | 1.71% | -30.78% | |
60 Neutral | $7.23B | 11.55 | 3.67% | 4.04% | 2.96% | -13.54% | |
46 Neutral | $47.36M | ― | -41.01% | ― | -12.86% | -386.01% | |
45 Neutral | $1.94B | 59.62 | -23.45% | 3.09% | -9.34% | -852.37% |
* Consumer Cyclical Sector Average
Performance Comparison
PRTS
CarParts.com Inc
0.82
-0.49
-37.40%
AAP
Advance Auto Parts
30.88
-41.41
-57.28%
AZO
AutoZone
3,566.86
628.60
21.39%
GPC
Genuine Parts Company
112.17
-27.57
-19.73%
ORLY
O'Reilly Auto
1,364.36
269.56
24.62%
BWMX
Betterware de Mexico
10.14
-6.66
-39.64%
CarParts.com Inc Earnings Call Summary
Earnings Call Date: Mar 25, 2025 | % Change Since: -19.61% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Negative
The earnings call presented a mixed picture with significant progress in expanding supply chain capabilities, mobile app growth, and B2B expansion. However, these positives were overshadowed by a notable decline in revenue, substantial net losses, and increased costs affecting margins.Highlights
Gross Profit Margin Near Upper End of Guidance
Full-year gross profit of $197 million and gross profit margin of 33.4% was near the upper end of guidance, despite challenges.
Expansion of Vertically Integrated Supply Chain
Optimized supply chain with in-house capabilities leading to attractive product margins in the mid-fifties percent.
Direct-to-Consumer Fulfillment Network Expansion
Expanded network can cover 98% of the population with two-day shipping, including a new semi-automated facility in Las Vegas processing 25% of volume.
Mobile App Growth
The mobile app now has over 800,000 users in less than 18 months and accounts for over 10% of e-commerce revenue.
B2B Business Expansion
Launched same and next-day delivery in North Florida market with a contribution margin up to three times higher than e-commerce.
High Margin Fee Income Offerings
Launched offerings including shipping and product protections, affiliate revenue, and premium memberships, contributing to increased net profit margins.
Lowlights
Revenue Decline
Full-year revenues of $588.8 million were down 13% from 2023, primarily driven by increased pricing and soft consumer demand.
Significant Net Loss
GAAP net loss for the year was $40.6 million, compared to a loss of $8.2 million in 2023, mainly due to lower gross profit.
Adjusted EBITDA Loss
Adjusted EBITDA loss of $7.1 million for 2024, down from $19.7 million in 2023, impacted by soft demand and competitive pressure.
Increased Outbound Transportation Costs
Gross margin decline driven by increased outbound transportation costs, despite higher pre-freight gross margin.
Inventory Reduction
Inventory balance reduced to $90.4 million at year-end, down from $128.9 million at the end of 2023.
Company Guidance
In the CarParts.com 2024 fiscal year-end conference call, the company reported revenues of $588.8 million, down 13% from the previous year's $675.7 million, with gross profit at $196.7 million, representing a gross margin of 33.4%. The GAAP net loss for the year was $40.6 million, compared to a loss of $8.2 million in 2023, primarily due to lower gross profit and increased outbound transportation costs. Despite these challenges, the company maintained a cash position of $36.4 million with no revolver debt, and an inventory balance of $90.4 million at year-end. For 2025, CarParts.com aims to expand its product offering, increase average basket size, and scale its B2B business, while focusing on high margin fee income and mobile app growth to diversify its marketing mix. The strategic focus also includes maintaining a strong balance sheet and managing cash flow effectively, as the company navigates its way within the $400 billion auto parts market.CarParts.com Inc Corporate Events
M&A TransactionsBusiness Operations and Strategy
CarParts.com Explores Strategic Alternatives for Shareholder Value
Neutral
Mar 5, 2025
On March 5, 2025, CarParts.com announced it is exploring strategic alternatives, including a potential sale, to maximize shareholder value. The company has engaged financial and legal advisors to assist in this process, which is a response to strategic inquiries received. While no timeline is set for completing this exploration, the company emphasizes its commitment to evaluating options that could impact its future operations and shareholder interests.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.