5 Reddit Stocks that Flopped in 2021

2. Vroom, Inc. (NASDAQ:VRM)

Number of Hedge Fund Holders: 23 

Year-to-Date Decline in Share Price: 62%  

Vroom, Inc. (NASDAQ:VRM) runs an ecommerce platform for buying and selling cars. The stock has been hit in recent weeks following reports that used car platforms were being investigated by the government over hundreds of complaints regarding delayed registrations and poor customer service. 

Truist analyst Naved Khan recently lowered the price target on Vroom, Inc. (NASDAQ:VRM) stock to $40 from $54 but kept a Buy rating, noting that supply chain issues and labor shortages were causing “transitory headwinds” for the firm. 

At the end of the third quarter of 2021, 23 hedge funds in the database of Insider Monkey held stakes worth $119 million in Vroom, Inc. (NASDAQ:VRM), up from 21 in the preceding quarter worth $180 million. 

In its Q3 2021 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Vroom, Inc. (NASDAQ:VRM) was one of them. Here is what the fund said: 

“Vroom, Inc. (VRM) was down 47.31% after reporting earnings that beat expectations but disappointed on guidance. Revenue of $761.9M beat consensus of $647.4M with EBITDA of -$60.7M slightly beating consensus of -$60.9M. The company guided for total revenue of $858-$891M versus consensus of $699M, but both gross margins and EBITDA disappointed. The company’s gross margin guidance of 6.2% was well below expectations of 8.8% leading to EBITDA of -$100M to -$92M against expectations -$59.4M as the company continues to invest for growth. The company also announced the appointment of Robert Krakowiak as CFO effective immediately, with David Jones remaining with the company through the end of November.”