At a cursory glance, CarParts.com (PRTS) – an online provider of aftermarket auto parts – might not seem like a remarkable enterprise. Sure, it’s relevant but with so much interest focused on electric vehicles, keeping aging combustion-powered cars on the road seems incongruent with the prevailing social and business framework. Still, that assessment could be dead wrong, which makes PRTS stock worthy of careful consideration.

PRTS Stock Disappoints But a Resurgence Could Be in Order

In fairness, critics of the auto parts retailer have legitimate reasons to be concerned. Aside from the boring and seemingly obsolescing nature of the business, CarParts.com has failed to sustainably spark bullish investor interest. For example, since the beginning of the year, PRTS stock dropped almost 30% of equity value. In the trailing one-year period, it slipped over 48%.

Moreover, management failed to give its supporters a clear incentive to hold on. Recently, the auto parts specialist released its results for the second quarter. According to Barchart content partner The Motley Fool, CarParts.com’s revenue grew just 0.4% on a year-over-year basis to $177 million. Also, against a two-year framework, the growth came out to only 12%. Still, the tally beat the consensus estimate calling for $175.8 million.

However, the bottom line wasn’t so appealing. Management disclosed a GAAP loss of 1 cent, down from a per-share profit of 7 cents in the year-ago quarter. Also, the figure missed analysts’ expectations, which called for a breakeven estimate. CarParts.com’s leadership team cited macro-level challenges leading to slow growth. Also, some of its customers traded down to cheaper products or delayed purchases altogether.

Moving forward, the company anticipates sales growth to land between 3% to 5% for the second half of the year. As a warning, management stated that it continues to expect a tough macroenvironment throughout 2023.

Nevertheless, CarParts.com has an eye on the future phase of growth. Per TMF, “[i]t just launched a mobile app on both iOS and Android, giving it an opportunity to more directly capture and monetize its customer relationships. The company currently gets most of its traffic from the mobile channel, but relies on paid and organic search from sources like Google, rather than direct traffic.

Also, the mobile app directive is a shrewd play as a direct communication channel to its customers would reduce marketing costs. Combined with an extraordinarily compelling optimistic narrative, PRTS stock deserves to be on your radar.

CarParts.com Aligns Favorably with Present Realities

With electrification of everything becoming the norm, it’s still easy to appreciate the hesitation toward PRTS stock. No longer does the EV realm belong exclusively to one brand. Today, several enterprises – from risky startups to new divisions within established legacy automakers – provide plenty of competition. Also, with the rise of the air mobility market, CarParts.com seems to be dancing on the losing side of inevitability.

However, the forwarding of technological innovation is one thing; mass integration represents a completely different topic. Whether we’re talking about personal computers or flat-screen televisions, the first batch of pioneering products tend to be extremely expensive. As economies of scale develop and cost-reducing efficiencies materialize, the masses can finally enjoy the original invention.

That’s one component that helps PRTS stock. Quite frankly, EVs are still too expensive. Around the final months of last year, the average price of a new EV stood at $66,000. This year, the price may have fluctuated but it didn’t fluctuate that much. We know this because Americans – repelled by high car prices – are holding onto their vehicles for longer than ever.

In other words, if it were so easy to replace a combustion car with an EV, more people would have done it. But because of the prohibitive price structure for average households, pivoting to EVs is not the solution. Therefore, PRTS stock should rise as demand for aftermarket parts should cynically remain robust.

The other bullish component is that drivers can’t defer critical auto parts purchases indefinitely. Like anything involving mechanics, cars wear out, no matter how much you take care of them. Therefore, the deferral of purchases that CarParts.com suffered in Q2 may yield rising demand in future quarters as customers are basically forced to acquiesce.

Analysts Just Doing the Math

Interestingly, while the Barchart Technical Opinion indicator pegs PRTS stock as a 48% sell, Wall Street analysts have a completely different take. Right now, CarParts.com represents a consensus strong buy, breaking down as three strong buys and one moderate buy. Significantly, PRTS suffers no holds, let alone sell ratings.

What’s even more remarkable is the magnitude of bullishness. Per Barchart, the mean price target among the Street’s experts for PRTS stock lands at $10.88, implying nearly 147% upside potential. Even more enticing, the high-side target stands at $17, implying over 285% growth.

I corroborated the analysts’ assessments with another source and these forecasts match up. These are not typos (which can sometimes happen). No, analysts legitimately see massive upside for PRTS stock and it really comes down to the math.

Essentially, consumers can’t afford to replace their vehicles, combustion or otherwise. Therefore, at some point, they must buy auto parts to keep their mode of transportation moving. So yes, PRTS stock is dancing with inevitability but it might very well be on the right side.

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