How to Buy Turo Stock

Read our Advertiser Disclosure.
Contributor, Benzinga
March 3, 2022

Attractive as it may be, the central premise of many popular online finance gurus is a deception. Using various forms of what federal regulators call the “phantom riches” tactic, so-called experts sell unsuspecting audiences a single catalyst — typically saving money — to guide them to a path of riches. 

Indeed, the big lie about many finance gurus is that they shift the responsibility of wealth creation on the individual. But the harsh reality is that no matter how smart, how dedicated, how enterprising, how intrepid you are, you can only go so far. While the professional athletics community celebrates the recently concluded career of quarterback Tom Brady, he wouldn’t amount to much if he didn’t have an offensive line blocking for him.

It's this eureka moment that separates Turo Inc. from most other gig-economy platforms, including the vaunted Uber Technologies Inc. (NYSE: UBER). To be frank, individual ride-sharing providers can only achieve so much since drivers can only service one ride at a time.

With Turo, the emphasis is not necessarily on the person but rather the asset. Thus, business expansion for participants is not only possible but represents the driving force behind the Turo brand.

What is Turo?

One of the most prominent names in the sharing economy, Turo is a peer-to-peer network that enables everyday people to rent out their cars to interested clients. Similar to ride-sharing platforms, Turo acts as an online intermediary, connecting would-be renters with car owners. Customers enjoy the benefit of varied automotive options at lower costs while owners can convert a depreciating product to an income-generating asset.

Theoretically, through service differentiation and competitive pricing, it’s possible for vehicle lenders to generate a reliable stream of monthly income. From there, lenders could expand their fleet, essentially stacking assets from the underlying cash flow. Ultimately, participants can accelerate their business through Turo, leveraging basic financial principles to act as force multipliers.

When is the Turo IPO Date?

Following a relatively quiet month for new listings, Turo puts the concept of the initial public offering (IPO) — the first time a company distributes its equity shares to retail investors — back in the spotlight. The grandest market debut so far this year, Turo appears likely to attract significant interest when it inks its name on the IPO calendar.

At time of writing, Turo has not yet revealed its launch date. Further, rumors from anonymous sources within the organization suggest that the IPO could be delayed to March. What investors do know is that the car-sharing service provider filed for its public intentions confidentially with the U.S. Securities and Exchange Commission (SEC) on Aug. 6, 2021.

Further, Turo filed its Form S-1 prospectus on Jan. 10, 2022, disclosing an intention to raise $100 million, though no per-share pricing terms were revealed. In all likelihood, this submission is a placeholder, with covering analysts anticipating a raise up to $300 million.

In addition, management intends to have shares listed in the New York Stock Exchange under the ticker symbol TURO. Morgan Stanley (NYSE: MS), JPMorgan Chase & Co. (NYSE: JPM), Allen & Company and Citigroup Inc. (NYSE: C) represent the joint bookrunners for the offering.

Should Turo launch its IPO within the next several weeks, it may enjoy tailwinds that could heartily bolster its valuation. Primarily, millions of Americans are tired of the myriad restrictions that the COVID-19 pandemic imposed. Even with the rapidly spreading omicron variant, people have been ardently regaining control of their daily lives, a component of a phenomenon known as retail revenge.

Naturally, with more travelers cycling through the nation’s airports, traditional rental-car services such as Hertz Global Holdings Inc. (NASDAQ: HTZ) and Avis Budget Group Inc. (NASDAQ: CAR) benefitted from a surge in investor sentiment late last year before succumbing to market pressures this year. Still, as more segments of society normalize, robust demand could distribute plenty of revenue-making opportunities for both “analog” and digital car services.

As well, the U.S. Department of Labor released a surprisingly vigorous jobs report for January, with 467,000 added employment positions exceeding economists’ consensus estimate by 150,000. Such powerful numbers could catapult more clients to Turo’s platform, boding well for TURO stock.

However, the encouraging jobs report may also impose an ironic headwind as the Federal Reserve may use the positive data as justification to unleash its previously signaled hawkish monetary policy. Therefore, what could be good for Turo customers could be bad for TURO stock.

Turo Financial History

Immediately separating Turo from other innovative firms is that the car-sharing service delivers the goods on the financial statements, thereby providing a credible framework for future upside. Still, as with any investment, pros and cons exist, so you’ll want to assess the whole context before proceeding with TURO stock.

According to the company’s Form S-1 filing, Turo managed to ring up $149.9 million in revenue for 2020, gaining nearly 6% from 2019’s sales tally. Perhaps no other statistic demonstrates the power of the Turo brand than this year-over-year growth rate. The ability to extract growth when vehicle miles traveled dropped over 13% during the same period is simply mind boggling.

Thus, it’s no surprise that with pandemic-related headwinds fading, the nine months ending Sept. 30, 2021, saw a powerful surge. With the restrictor plates removed, Turo accelerated to a revenue haul of $330.5 million, more than tripling the $107.8 million in sales posted in the year-ago level. Presumably, with more money in consumers’ pockets and an increased desire to reclaim social experiences, Turo may see growth expand throughout 2022.

However, not every aspect undergirding TURO stock is so encouraging. Prospective buyers should note that in 2020, despite the sales increase, net losses amounted to $97.1 million, a modest improvement from a loss of $98.6 million in 2019.

Even more problematic is the first three quarters of 2021, which saw net losses expand to $129.3 million from a $51.7 million loss in the year-ago period. To be fair, the most recent nine-month period saw income from operations hit a decidedly positive $46.5 million. Nevertheless, investors will want to ensure that the company has a legitimate pathway toward consistent profitability.

Turo Potential

Two main factors buttress the upside potential for TURO stock. On the more cynical end, ride-sharing services gained tremendous popularity during the pre-pandemic years because of factors such as convenience and unwillingness to drive oneself during congested hours. However, COVID-19 and the various fears (and paranoias) that it sprouted may see people eschew platforms like Uber for car-sharing services like Turo.

On a business level, Turo allows everyday people to convert “deadweight” assets into sales-generating machines. According to the Massachusetts Institute of Technology, private cars sit parked 95% of the time. Such a circumstance leads to clogged transportation infrastructure and lost opportunities. Thus, Turo asks the obvious question: why not make money during the down time?

Still, shares also face massive long-term risks. Primarily, the underlying business model presents a legal nightmare, especially in terms of liability when circumstances go awry — which they inevitably do in this business.

More worryingly, even without the legal overhang, the car-sharing business might not be sustainable. As Thrillist.com describes, people do strange things in rental vehicles, much of it not fit for print. In the end, the hassles may not be worth it for car owners.

How to Buy Turo IPO (TURO) Stock

If you choose to acquire TURO shares in the open, you must know how to buy stocks. Below is a quick guide.

Step 1: Pick a brokerage.

With the best brokers competing on similar incentives, focus your efforts on finding the platform right for you.

Step 2: Decide how many shares you want.

Since IPOs are incredibly risky, it’s best to participate with a balanced share count.

Step 3: Choose your order type.

Before trading, learn these market concepts.

  • Bid: The buyer’s best offer for a stock.
  • Ask: The seller’s lowest acceptable price.
  • Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
  • Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
  • Market order: Market orders guarantee fulfillment but only at the current rate.
  • Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
  • Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.

Step 4: Execute your trade.

Follow these steps to execute a market order:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

TURO Restrictions for Retail Investors

Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.

TURO Pre-IPO

If you wish to buy TURO on a pre-IPO (initial offering price) basis, visit Freedom Finance. You have until March 14, 2022 to apply.

Hitch a Ride or Get Taken for One?

At first glance, the narrative for TURO stock is incredibly appealing: allow car owners to make money off the 95% of the time they’re not using their vehicles. However, the viability of the business model should make you think carefully before moving forward.

About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.