Buy Rating for RumbleON: Unique Market Position and Strong Financial Prospects

Robert W. Baird analyst Craig Kennison maintained a Buy rating on RumbleON (RMBL – Research Report) today and set a price target of $10.00.

Craig Kennison has given his Buy rating due to a combination of factors including RumbleON’s unique position in the market as the only omnichannel powersports platform. This distinction allows the company to leverage both its physical retail locations and its strong e-commerce infrastructure to cater to both retail and wholesale transactions. Kennison’s confidence in RumbleON is also influenced by the company’s recent management shifts, noting the addition of Michael Quartieri as a director, who brings financial expertise from his current tenure as CFO at Dave & Busters Entertainment. Despite the resignation of CFO Blake Lawson for personal reasons, the company maintains a positive outlook on its financial health, which supports the Buy rating.

Kennison’s valuation method for setting a $10 price target involves a forward-looking multiple of 8-10 times the next twelve months’ (NTM) adjusted EBITDA, considering the company’s potential actions to strengthen its balance sheet. Furthermore, the comparison to valuation multiples of other companies in the recreational products sector, which typically range from 6-12 times EBITDA, suggests that RumbleON’s stock is valued appropriately within the industry context. Kennison acknowledges the sensitivity of powersports demand to various economic and market factors, but his overall analysis leads to the conclusion that RumbleON’s stock presents a favorable investment opportunity, hence the Buy recommendation.

Kennison covers the Consumer Cyclical sector, focusing on stocks such as Polaris, Malibu Boats, and MasterCraft Boat Holdings. According to TipRanks, Kennison has an average return of 4.9% and a 50.64% success rate on recommended stocks.

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RumbleON (RMBL) Company Description:

RumbleOn, Inc. operates a capital light disruptive e-commerce platform facilitating the ability of both consumers and dealers to buy-sell-trade-finance pre-owned vehicles in one online location. It operates through the Vehicle Distribution, and Vehicle Logistics Transportation business segments. The Vehicle Distribution segment distributes power sports and automotive and is anchored on a proprietary supply chain and distribution software platform that is supported with its mobile-first web and application strategy. The Vehicle Logistics Transportation segment provides nationwide automotive transportation services between dealerships and auctions. RumbleOn was founded by Matthew A. Lane on October 24, 2013 and is headquartered in Irving, TX.