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Shift Technologies: Cheap For Good Reason

Mar. 26, 2023 4:51 AM ETShift Technologies, Inc. (SFTGQ)5 Comments
Vlad Deshkovich profile picture
Vlad Deshkovich


  • Shift Technologies is in the middle of a strategy pivot while staring down significantly decreased revenues.
  • It is facing an uphill battle on gross margin as used car prices have continued to decline, and this shrank to less than 1% in the most recent quarter.
  • Being neither profitable nor cash flow generative, Shift is in a tough place at the moment - and its price reflects that.
  • If management can move the needle on certain core variables, there could be something here - but there isn't just yet.

Yellow color Gas pump nozzle pumping gasoline fuel in a car at gas station

simon2579/iStock via Getty Images


Shift Technologies (SFT) is an online car retailer akin to Carvana. Founded in 2013, the company has grown throughout the previous decade and first entered the public markets via SPAC merger in Q4 2020. The company’s

This article was written by

Vlad Deshkovich profile picture
Proprietary trader primarily covering technology stocks.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (5)

treespace profile picture
What would success by this money-losing operation look like? Low margins and massive competition as far as the eye can see. Who wants to invest in such a crappy business with so little upside potential?
1. The balance sheet will have roughly 125 mil for Q4 since LOTZ acquisition. (How much did they burn?)
2. Focusing on value cars - very good in inflationary and recessions environments. People buy cheap and used cars. Shift can maintain good gross margins.
3. AcquireAuto Platform and partnership with off-lease company in FL. Having other dealerships use their tech platform is good and extra revenue stream. Need to see if more dealers are joining to use it.
4. F&I gross margins looking good. Will they continue and offset high SG&A?
5. Jeff Clementz’s leadership - proven at Walmart.com. Being young, he won’t risk his career drowning Shift.
6. Fixed and variable costs are less.


I don’t want them to dilute more - especially since reverse split is done.

I wanna see how they manage their debt of 200 bil.
treespace profile picture
@bubbagang Dilution would be an improvement over bankruptcy which is not an unlikely outcome. I don't know if it's Shift's execution or the nature of the business (low margins, capital intensive, massive competition) but this is un-investible. Same for Vroom, and the macro is getting worse.
dlvvlv profile picture
Next quarter's CC will be full of encouraging "potential" fulfillment promises that will depend on 'major' improvements in the used car markets that may or may not happen quickly enough. So, the odds are stacked against SFT surviving. JMTC
How come you came up to this company? Also why not wait for Q4 for the article as it is in two days?
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