This Tiny Stock Could Turn Into the Amazon of the Automotive Parts Aftermarket By Luke Lango and the InvestorPlace Research Staff Traditionally, buying auto parts was something you did in store. You got in your car. You drove down to the local AutoZone. You spent an hour running through the store, talking to experts about what parts you needed, comparing specs, and checking out. You drive back home. You install the car part. And maybe two or three hours later, the process is complete. In other words, auto parts shopping has historically been this long, tedious, and exceptionally inconvenient process. But, at the same time, no one wanted to shop for those auto parts online, either. By 2019, less than 5% of the $281 BILLION automotive parts aftermarket had shifted online. Why didn’t anyone want to shop for auto parts online? Habit. Humans are creatures of habit. Over the past several decades, going to AutoZone for a car part has been as habitual as brushing your teeth. It’s just something we did, and it worked, so why change it? Then along came Covid-19. It forced consumers to change habits. For many, one of those changed habits was going to AutoZone. Consumers – for the first time ever – started shopping for car parts online, and e-commerce penetration rates in the automotive aftermarket jumped to 5%. This is the beginning of a long-term paradigm shift. You see… online auto parts shopping has always been more convenient than in-store auto parts shopping. There’s no commute time. There’s no looking for items in various aisles. There’s no waiting in a long checkout line. It’s just type, browse, click, pay, and wait for delivery. The writing has been on the wall for a long time. Online auto parts shopping was always going to be the future of the automotive aftermarket. That future simply needed an impetus. Covid-19 is that impetus. It has forced consumers to change their habits. And now that they’ve pivoted to online auto parts shopping, they’re not going back. This is the beginning of the $281 billion auto parts market shifting almost entirely online. The result, of course, will be the creation of an Amazon-like e-commerce business in the auto parts market. We think we found that business. In today’s edition of The Daily 10X, we’re going to tell you all about that company. It’s a tiny company, that has been in the online automotive parts aftermarket business for a while, but which has successfully pulled off an incredible turnaround at the perfect time – and which is now in a great position to be the e-commerce giant this industry needs. Best part? The market cap is just $860 million, versus $35 billion for AutoZone. Of course, that means successful execution here will generate enormous returns. Pulling Off an Incredible Turnaround at the Perfect Time to Build a Booming E-Commerce Business Everyone likes to say Amazon dominates the e-commerce market. But when you sit back and actually think about it, Amazon doesn’t – they dominate the general goods e-commerce market, but when it comes to specialized industries, Amazon “derivative” platforms have emerged as the go-to solutions. In furniture, you have Wayfair. In pet food, you have Chewy. In arts and crafts, you have Etsy. In cars, you have Carvana. And in auto parts, you have CarParts.com (PRTS). CarParts.com is an e-commerce platform for auto parts. The company has been around for a while. It was founded in 1995, and has been a bumbling business with sluggish growth and no real future ever since. But over the past 24 months, this company has pulled off an incredible turnaround, and is now one of the fastest growing e-commerce businesses in the world. A new management team assumed control. They formed marketing, data science, technology, and inventory forecasting teams to improve biz operations. They doubled the distributer center footprint. They overhauled the website, and actually consolidated 17 different auto parts websites into one e-commerce platform. They made that e-commerce platform mobile friendly with personalization options. They paid off all outstanding debt and gave the company resources to invest in itself for growth. The results of these mass-scale changes are in the numbers. This was a company that had posted negative revenue growth for years. But starting in early 2020, CarParts.com has rattled off six consecutive double-digit revenue growth quarters, including 32% revenue growth last quarter. The stock roared higher alongside those booming results. Now, the stock is consolidating because investors are worried the booming times are over, as the Covid-19 tailwinds is drying up. However, we don’t see this as a Covid-19 story – rather, we see the pandemic as the catalyst for a multi-year growth story wherein consumers continue to shift towards online auto parts buying and CarParts.com sustains double-digit revenue growth. Let’s say that happens… You’re talking a company that could easily be looking at $2 billion in revenues by 2025 or 2026 (revenues are expected at $560 million this year). E-commerce stocks normally trade around 5X sales. That imputes a $10 billion potential future valuation on CarParts.com – and that’s still a long ways off from AutoZone’s $35 billion valuation. In other words, even if CarParts.com only steals a little bit of market share from AutoZone thanks to digitization tailwinds, CarParts.com stock could be a multi-bagger. And that’s why you may want to consider adding CarParts.com stock to your portfolio today. Sincerely, 
Luke Lango
Editor, The Daily 10X Stock Report Small-cap stocks that can rise 10X over the long run are often volatile. If you are interested in this stock, buy it like a pro by setting strict limit prices. Learn more about how to use limit orders here. | Key Company Details | | Company Name | CarParts.com, Inc. | | Ticker Symbol | PRTS | | Yesterday's Close | $15.90 | | Current Market Value | $864.70 Million | | Annual Revenue | $539.47 Million | | Catalyst | Online Auto Parts E-Commerce |
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