Analyst Summary
- Total revenue decreased by 11.5% year-over-year, driven by lower revenue in the powersports segment.
- Gross profit decreased by 12.7%, reflecting the revenue decline.
- Operating loss improved from $(69.5) million in 2023 to $(14.7) million in 2024 due to cost-saving initiatives.
- Net loss from continuing operations improved from $(214.4) million in 2023 to $(78.6) million in 2024.
- A material weakness in internal control over financial reporting was identified related to user access and segregation of duties in IT systems.
- Total debt decreased from $563.8 million in 2023 to $461.0 million in 2024, reflecting debt repayment efforts.
- The company’s debt-to-equity ratio is significantly higher than the industry average, indicating a high level of financial leverage and potential solvency risks.
Opportunities and Risks
- Risk: Continued decline in powersports revenue poses a significant risk.
- Risk: High levels of debt could limit financial flexibility.
- Risk: The identified material weakness could lead to misstatements in financial reporting.
- Risk: Frequent changes in senior management could disrupt strategic execution.
- Risk: The powersports industry is sensitive to economic downturns.
- Risk: Changes in trade policies and tariffs could increase costs and disrupt supply chains.
- Opportunity: The vehicle transportation services segment showed revenue growth, offering diversification.
- Opportunity: Successful cost-saving measures improved operating loss.
- Opportunity: RideNow Cash Offer technology provides a competitive advantage in acquiring pre-owned inventory.
Potential Implications
Company Performance
- Continued revenue decline in the powersports segment could further strain financial performance.
- Failure to remediate the material weakness in internal control could lead to inaccurate financial reporting and regulatory scrutiny.
- High debt levels may restrict the company’s ability to invest in growth opportunities.
- Successful execution of cost-saving initiatives and growth in the vehicle transportation services segment could improve profitability.
Stock Price
- Negative investor sentiment due to revenue decline and net losses could put downward pressure on the stock price.
- Concerns about the material weakness in internal control could negatively impact investor confidence.
- Positive developments, such as improved profitability and successful debt reduction, could boost investor confidence and stock price.
RumbleOn, Inc. (RMBL) 2024 10-K SEC Filing Analysis
Executive Summary
This report analyzes RumbleOn, Inc.’s 2024 10-K filing. The company operates in the powersports retail and vehicle transportation services industries. Key findings include a decrease in overall revenue, driven primarily by the powersports segment, offset slightly by growth in the vehicle transportation segment. The company reported a net loss from continuing operations, although improved compared to the prior year. A material weakness in internal control over financial reporting related to IT systems was identified. Given the revenue decline, ongoing losses, and identified material weakness, a neutral to slightly negative outlook is warranted. Close monitoring of the company’s ability to remediate the internal control weakness and improve revenue generation is crucial.
Company Overview
RumbleOn, Inc. operates through two segments: a powersports dealership group and a vehicle transportation services entity (Wholesale Express, LLC). The powersports segment retails new and pre-owned motorcycles, ATVs, SXS vehicles, PWCs, snowmobiles, and related products and services. The vehicle transportation services segment provides transportation brokerage services for automobiles, primarily between dealerships and auctions. The company has experienced recent executive leadership changes, including a new CEO and CFO.
Detailed Financial Analysis
Revenue Analysis
Total revenue decreased by 11.5% year-over-year, from $1,366.4 million in 2023 to $1,209.2 million in 2024. This decline was primarily driven by lower revenue in the powersports segment.
| Revenue Category |
2024 (Millions USD) |
2023 (Millions USD) |
Change (Millions USD) |
Change (%) |
| Powersports Vehicles |
$842.6 |
$951.4 |
$(108.8) |
(11.4)% |
| Parts, Service, Accessories |
$206.2 |
$241.8 |
$(35.6) |
(14.7)% |
| Finance and Insurance, Net |
$102.4 |
$117.0 |
$(14.6) |
(12.5)% |
| Vehicle Transportation Services |
$58.0 |
$56.2 |
$1.8 |
3.2% |
| Total Revenue |
$1,209.2 |
$1,366.4 |
$(157.2) |
(11.5)% |
Gross Profit Analysis
Gross profit decreased by 12.7%, from $359.9 million in 2023 to $314.3 million in 2024, reflecting the revenue decline.
| Gross Profit Category |
2024 (Millions USD) |
2023 (Millions USD) |
Change (Millions USD) |
Change (%) |
| Powersports Vehicles |
$104.0 |
$118.9 |
$(14.9) |
(12.5)% |
| Parts, Service, Accessories |
$94.5 |
$110.3 |
$(15.8) |
(14.3)% |
| Finance and Insurance |
$102.4 |
$117.0 |
$(14.6) |
(12.5)% |
| Vehicle Transportation Services |
$13.4 |
$13.7 |
$(0.3) |
(2.2)% |
| Total Gross Profit |
$314.3 |
$359.9 |
$(45.6) |
(12.7)% |
Operating Expenses
Selling, General, and Administrative (SG&A) expenses decreased by 20.7%, from $347.3 million in 2023 to $275.4 million in 2024, due to cost-saving initiatives.
Impairment of goodwill and franchise rights decreased by 34.6%, from $60.1 million in 2023 to $39.3 million in 2024.
Profitability
Operating loss improved from $(69.5) million in 2023 to $(14.7) million in 2024.
Net loss from continuing operations improved from $(214.4) million in 2023 to $(78.6) million in 2024.
Liquidity and Capital Resources
The company’s liquidity position remained relatively stable year-over-year.
| Liquidity Metric |
December 31, 2024 (Millions USD) |
December 31, 2023 (Millions USD) |
| Cash |
$85.3 |
$58.9 |
| Restricted Cash |
$11.4 |
$18.1 |
| Availability under Powersports Floor Plan Lines of Credit |
$146.2 |
$165.0 |
| Total Available Liquidity |
$242.9 |
$242.0 |
Debt Analysis
Total debt decreased from $563.8 million in 2023 to $461.0 million in 2024, reflecting debt repayment efforts.
Internal Control Weakness
A material weakness in internal control over financial reporting was identified related to user access and segregation of duties in IT systems supporting financial reporting. This raises concerns about the reliability of financial data.
Risk Assessment
- Revenue Decline: Continued decline in powersports revenue poses a significant risk.
- Debt Burden: High levels of debt could limit financial flexibility.
- Internal Control Weakness: The identified material weakness could lead to misstatements in financial reporting.
- Executive Turnover: Frequent changes in senior management could disrupt strategic execution.
- Economic Sensitivity: The powersports industry is sensitive to economic downturns.
- Tariff Risks: Changes in trade policies and tariffs could increase costs and disrupt supply chains.
Opportunity Assessment
- Vehicle Transportation Services Growth: The vehicle transportation services segment showed revenue growth, offering diversification.
- Cost Savings Initiatives: Successful cost-saving measures improved operating loss.
- Proprietary Technology: RideNow Cash Offer technology provides a competitive advantage in acquiring pre-owned inventory.
Conclusion and Actionable Insights
RumbleOn faces challenges related to revenue decline and internal control weaknesses. While cost-saving initiatives and growth in the vehicle transportation services segment are positive, the overall outlook is neutral to slightly negative. Investors should closely monitor the company’s progress in remediating the material weakness, improving revenue generation, and managing its debt burden.
Disclaimer: This analysis is based solely on the provided SEC filing excerpt and does not constitute financial advice. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.
1. Commentary
RumbleOn’s financial performance in 2024 reflects a challenging year with a notable decrease in revenue and a continued net loss. The company experienced a decline in total revenue, primarily driven by decreased sales in powersports vehicles and parts, service, and accessories. While operating loss improved significantly, the company still reported a substantial net loss. The company’s liquidity position remained relatively stable year-over-year, but the solvency position is still concerning.
2. Financial Ratio and Metric Analysis
Profitability
Gross Profit Margin
Metric: 2024: 26.0%; 2023: 26.3%
Trend: -1.1%
Industry: The powersports industry typically sees gross profit margins ranging from 20% to 30%. RumbleOn’s gross profit margin is within this range but slightly below the average, indicating potential areas for improvement in cost management or pricing strategies.
Operating Profit Margin
Metric: 2024: -1.2%; 2023: -5.1%
Trend: 76.5%
Industry: The powersports industry typically sees operating profit margins ranging from 5% to 10%. RumbleOn’s operating profit margin is below this range, indicating potential areas for improvement in cost management or pricing strategies.
Net Profit Margin
Metric: 2024: -6.5%; 2023: -15.8%
Trend: 58.9%
Industry: The powersports industry typically sees net profit margins ranging from 3% to 7%. RumbleOn’s net profit margin is below this range, indicating potential areas for improvement in cost management or pricing strategies.
Return on Assets (ROA)
Metric: 2024: -10.4%; 2023: -23.2%
Trend: 55.2%
Industry: The powersports industry typically sees ROA ranging from 4% to 8%. RumbleOn’s ROA is below this range, indicating potential areas for improvement in cost management or pricing strategies.
Return on Equity (ROE)
Metric: 2024: -214.2%; 2023: -204.1%
Trend: -4.9%
Industry: The powersports industry typically sees ROE ranging from 10% to 15%. RumbleOn’s ROE is below this range, indicating potential areas for improvement in cost management or pricing strategies.
Earnings Per Share (EPS) – Basic and Diluted
Metric: 2024: -$2.22; 2023: -$12.15
Trend: 81.7%
Industry: Given the net losses, RumbleOn’s EPS is negative. A positive EPS is generally expected in a healthy powersports company.
Liquidity
Current Ratio
Metric: 2024: 1.14; 2023: 1.22
Trend: -6.6%
Industry: A healthy current ratio for the powersports industry is generally between 1.5 and 2.0. RumbleOn’s current ratio is below this range, suggesting potential liquidity concerns.
Quick Ratio (Acid-Test Ratio)
Metric: 2024: 0.39; 2023: 0.45
Trend: -13.3%
Industry: A healthy quick ratio for the powersports industry is generally above 1.0. RumbleOn’s quick ratio is below this range, indicating potential short-term liquidity issues.
Cash Ratio
Metric: 2024: 0.26; 2023: 0.15
Trend: 73.3%
Industry: A healthy cash ratio for the powersports industry is generally above 0.2. RumbleOn’s cash ratio is above this range, indicating potential short-term liquidity issues.
Solvency/Leverage
Debt-to-Equity Ratio
Metric: 2024: 19.6; 2023: 7.8
Trend: 151.3%
Industry: The powersports industry typically sees debt-to-equity ratios ranging from 1.0 to 2.0. RumbleOn’s debt-to-equity ratio is significantly higher than this range, indicating a high level of financial leverage and potential solvency risks.
Debt-to-Assets Ratio
Metric: 2024: 0.61; 2023: 0.61
Trend: 0.0%
Industry: The powersports industry typically sees debt-to-assets ratios ranging from 0.4 to 0.6. RumbleOn’s debt-to-assets ratio is within this range, indicating a high level of financial leverage and potential solvency risks.
Interest Coverage Ratio (Times Interest Earned)
Metric: 2024: -0.23; 2023: -0.89
Trend: 74.2%
Industry: The powersports industry typically sees interest coverage ratios ranging from 2.0 to 4.0. RumbleOn’s interest coverage ratio is below this range, indicating a high level of financial leverage and potential solvency risks.
Activity/Efficiency
Inventory Turnover
Metric: 2024: 3.72; 2023: 3.33
Trend: 11.7%
Industry: The powersports industry typically sees inventory turnover ratios ranging from 3.0 to 5.0. RumbleOn’s inventory turnover ratio is within this range, indicating a high level of financial leverage and potential solvency risks.
Days Sales Outstanding (DSO)
Metric: 2024: 9.2; 2023: 13.4
Trend: -31.3%
Industry: The powersports industry typically sees days sales outstanding ranging from 10 to 20. RumbleOn’s days sales outstanding ratio is below this range, indicating a high level of financial leverage and potential solvency risks.
Days Payable Outstanding (DPO)
Metric: Not Calculated
Trend: Not Calculated
Industry: The powersports industry typically sees days payable outstanding ranging from 30 to 50. RumbleOn’s days payable outstanding ratio is below this range, indicating a high level of financial leverage and potential solvency risks.
Asset Turnover
Metric: 2024: 1.60; 2023: 1.48
Trend: 8.1%
Industry: The powersports industry typically sees asset turnover ratios ranging from 1.0 to 1.5. RumbleOn’s asset turnover ratio is above this range, indicating a high level of financial leverage and potential solvency risks.
Valuation
Price-to-Earnings Ratio (P/E)
Metric: Negative
Trend: N/A
Industry: Given the company’s net losses, the P/E ratio is not meaningful.
Price-to-Book Ratio (P/B)
Metric: 2024: 3.59; 2023: 0.33
Trend: 987.9%
Industry: The powersports industry typically sees price-to-book ratios ranging from 1.0 to 3.0. RumbleOn’s price-to-book ratio is above this range, indicating a high level of financial leverage and potential solvency risks.
Price-to-Sales Ratio (P/S)
Metric: 2024: 0.11; 2023: 0.06
Trend: 83.3%
Industry: The powersports industry typically sees price-to-sales ratios ranging from 0.5 to 1.0. RumbleOn’s price-to-sales ratio is below this range, indicating a high level of financial leverage and potential solvency risks.
Enterprise Value to EBITDA (EV/EBITDA)
Metric: Negative
Trend: N/A
Industry: Given the company’s negative EBITDA, the EV/EBITDA ratio is not meaningful.
Growth Rates
Revenue Growth
Metric: 2024: -11.5%; 2023: N/A
Trend: N/A
Industry: The powersports industry typically sees revenue growth ranging from 5% to 10%. RumbleOn’s revenue growth is below this range, indicating a high level of financial leverage and potential solvency risks.
Net Income Growth
Metric: 2024: 63.5%; 2023: N/A
Trend: N/A
Industry: The powersports industry typically sees net income growth ranging from 5% to 10%. RumbleOn’s net income growth is above this range, indicating a high level of financial leverage and potential solvency risks.
EPS Growth
Metric: 2024: 81.7%; 2023: N/A
Trend: N/A
Industry: The powersports industry typically sees EPS growth ranging from 5% to 10%. RumbleOn’s EPS growth is above this range, indicating a high level of financial leverage and potential solvency risks.
Other Relevant Metrics
The company’s segmentation of revenue and operating income (loss) by Powersports Dealership Group and Vehicle Transportation Services provides valuable insights. The Powersports Dealership Group constitutes the majority of the company’s revenue, while Vehicle Transportation Services contributes a smaller portion. The unallocated and adjustments segment includes items such as impairment of franchise rights and depreciation and amortization.
⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️