LOTZ - My DCF Model And Marketing Expenditures Make CarLotz A Buy
- CarLotz offers a consignment-to-retail used vehicle marketplace.
- In the last annual report, the company noted that marketing expenditures would increase from around $4 million to more than $15 million. As a result, I expect revenue growth.
- I expect the company’s technology and data analytics tools to successfully offer real-time information about prices, sellers, and buyers. As a result, the company will decrease the days-to-sale figure.
- If the company continues to build hubs, revenue growth would also continue. Notice that management needs the hubs to support the reconditioning fees charged to LOTZ’s corporate vehicle sourcing partners.
- Notice that I am using a WACC of 15%, which was above the discount used by other investment advisors. Investors lost a fortune on the stock, and the volatility in the past was significant. I want to be very cautious with LOTZ.
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My DCF Model And Marketing Expenditures Make CarLotz A Buy