#4 - CarParts.com (NASDAQ:PRTS)
If you believe that inflation and interest rates are likely to remain higher for longer, you’ll understand the thesis for CarParts.com, Inc. (NASDAQ: PRTS). Inflation is down from its 40-year highs of 2022. However, consumers continue to deal with sticky inflation in key areas.
One of those areas is new and used car pricing which are also being affected by rising interest rates that put them out of range for low- and middle-income consumers. That means that consumers are trying to keep their older cars in working order.
This is more than speculation. A report by S&P Global Mobility, cites the average age of light vehicles in the U.S. is at a record high of 12.5 years. This is bullish for a company that has been growing sales at a compound annual growth rate (CAGR) of 10%.
The risk to this bullish thesis is that the online auto parts market does not give the company a wide moat. Already competitors like AutoZone, Inc. (NYSE: AZO) and O’Reilly Automotive, Inc. (NASDAQ; ORLY) are taking steps to increase their digital presence. And that’s to say nothing about Amazon.com, Inc. (NASDAQ:AMZN) and Walmart, Inc. (NYSE: WMT). However, in the short term, PRTS stock looks like a speculative buy.
About CarParts.com
CarParts.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.
Read More - Current Price
- $1.09
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $1.60 (46.8% Upside)
