Why Wedbush Is Positive On RumbleON's Acquisition Of RideNow

RumbleON Inc’s RMBL infrastructure-light platform makes it easier for various value chain participants to deal in pre-owned vehicles, according to Wedbush.

The RumbleON Analyst: Seth Basham initiated coverage of RumbleOn with an Outperform rating and $55 price target.

The RumbleON Takeaways: The recently completed acquisition of RideNow should trigger strong growth at RumbleON, Basham said in an initiation note.

The transaction creates “the largest powersports dealership group in the country,” the analyst said.

“The combination of the two companies will create the only omnichannel customer experience in powersports and the only publicly-traded powersports dealer group, and gives RMBL the most comprehensive offering in the used powersports market.” 

The acquisition puts RumbleON on course to reaching its “long-term targets of ~$5b+ in revenue and $500m+ in EBITDA,” Basham said. 

“The $100b+ TAM powersports industry is made up of more than 7,000 distinct powersports dealerships in the U.S. and 85% of dealers operating only a single location, leaving the industry ripe for consolidation; RMBL’s comprehensive technology platform and leading RideNow dealership base positions the company well for additional acquisitions,” the analyst said. 

RMBL Price Action: Shares of RumbleON had risen by 2.62% to $35.78 at the time of publication Wednesday.