Online used car retailer Vroom has officially filed for an initial public offering, according to a filing from the Securities and Exchange Commission. However, analysts are cautious about whether or not this is the right time for the company to go public.

While the pandemic has shut down most planned IPOs, Vroom sees potential in increased online sales. “While it is too soon to measure the long-term impact of the Covid-19 pandemic on consumer behavior, in a survey conducted after the onset of the Covid-19 pandemic, consumers expressed a stronger preference for transacting online rather than offline,” the company wrote in the filing.

That optimism doesn’t exactly align with reality. After a 15% drop in e-commerce revenue in March, demand is now back to normal, the company said. However, gross profit per unit has yet to recover. And just a few weeks ago, the company furloughed around one-third of its staff, or around 210 people, and cut salaries for those who stayed on.

The filing also reveals that Vroom is still operating at a loss. For the first quarter of 2020, the company posted a net loss of $27.1 million, down from $41.1 million in Q1 2019. However, revenue rose 61% year-on-year to $375.8 million.

Earlier this month, we first reported on the company’s then-secret IPO filing. At the time, we speculated that Vroom’s decision may have been influenced by a surge in sales and market share at rival Carvana.

But as AIM Group Marketplace Report contributor Steve Greenfield noted, Vroom sold just 11% of Carvana’s volume in 2019 and at 60% of Carvana’s gross profit per unit. Vroom sold 19,000 vehicles at a gross profit per unit of $1,700, compared to Carvana’s 178,000 vehicles at $2,900 in gross profit per unit. However, in a comment on LinkedIn, automotive industry analyst Cliff Banks noted that Vroom was faring better than Carvana when the latter first filed for an IPO in 2016. At that point, Carvana had sold 18,761 vehicles and made an average of $1,023 on each unit sold.

Vroom also more than tripled its current inventory this week, likely in preparation for the IPO. Last week, the company had 614 vehicles listed on its site — this week it has 2,077 units available.

According to the filing, Vroom plans to raise $100 million. But, as MarketWatch noted, that number is usually used as a placeholder and will likely be updated as the company gets closer to listing shares.

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