Shares of online car retailer Cazoo (NYSE: CZOO) were up by more than 145% as of 10:04 a.m. ET Tuesday after the company reported earnings results for the second quarter. The U.K. company generated a loss of 243 million pounds ($297 million) on record revenue of 628 million pounds ($766 million).
“I am very proud of what we have accomplished so far in 2022 as we continue to transform the car buying and selling experience for consumers,” founder and CEO Alex Chesterman said in the earnings release.”We achieved record revenues and retail unit sales in Q2 and grew our market share significantly, despite the tough macroeconomic backdrop, as the consumer shift toward online car buying continues to accelerate.”
Cazoo management also reiterated its full-year guidance for revenue growth in the range of 110% to 125%, and 70,000 to 80,000 retail units sold. It expects to have cash and cash equivalents of 250 million pounds ($305 million) or more on the books as of year’s end.
Furthermore, management is undertaking a strategic review in which it will look for areas to reduce costs, achieve cash flow breakeven in its U.K. business, and reduce its need to raise funding for its business in mainland Europe.
Cazoo went public in late August 2021 via a merger with a special purpose acquisition company (SPAC), trading above $9 per share, but since October, the stock has gotten crushed. Prior to delivering the Q2 report, the stock traded for less than $0.50 per share. But the company currently has cash and cash equivalents of $488 million on its balance sheet and self-financed inventory of $214 million.
Trading at less than 50% of its projected 2022 revenue, this may not be the greatest stock in the world, but it does have upside potential from its current depressed levels.