Search

How an Online Auto Parts Start-Up Plans to Make Changing Tires Easier - Barron's

Parts iD stock got a bump with its first Buy rating.

Mykhailo Polenok/Dreamstime

An online auto parts start-up wants to make changing tires easier—and intends to do just that by adding thousands of locations to its installation network.

Parts iD (ticker: ID) has agreements to expand to about 12,000 tire installers—9,000 this year and 3,000 in 2022. Today, the number stands at about 1,600.

CEO Antonino Ciappina laid out the move Wednesday. “We have been focused on increasing our presence in the do-it-for-me segment of the automotive aftermarket industry and this initiative is a great step forward,” he said in a statement.

Here’s how the operation works: Customers can buy tires online and book an installation appointment at the same time. They get convenience—and installers get business without having to carry extra inventory.

Parts iD built an e-commerce platform to make finding the right part for the car and model year easier—for professional mechanics and do-it-yourselfers.

“We help customers find the right part as quickly as possible,” Ciappina told Barron’s in a recent interview.

Expanding the tire installation network is just another step on Parts iD’s path to disrupt the auto parts business. But the company is still small. Sales in 2020 amounted to about $400 million. Sales at AutoZone (AZO), O’Reilly Automotive (ORLY) and Advance Auto Parts (AAP), for instance, total roughly $36 billion.

On Tuesday, Parts iD picked up its first Buy rating. D.A. Davidson’s Michael Baker is the first analyst to cover the company and launched his coverage by rating shares Buy with a $12 price target.

Parts iD is relatively new—it merged with a special purpose acquisition company in November—and small, with a market capitalization of less than $300 million. Companies of that size only average about three analysts covering their stocks.

Baker sees sales doubling by 2025, hitting roughly 800 million. He projects positive free cash flow in 2021.

The analyst’s Buy rating drove shares up almost 9% Tuesday. Shares have gained about 12% over the past three months. The S&P 500 and Dow Jones Industrial Average both dropped a little less than 1%.

Write to Al Root at allen.root@dowjones.com

Let's block ads! (Why?)

Article From & Read More ( How an Online Auto Parts Start-Up Plans to Make Changing Tires Easier - Barron's )
https://ift.tt/3lMKlnp
Auto

Bagikan Berita Ini

0 Response to "How an Online Auto Parts Start-Up Plans to Make Changing Tires Easier - Barron's"

Post a Comment

Powered by Blogger.