CarParts.com, Inc. (PRTS) Bundle
How does a pure-play e-commerce company like CarParts.com, Inc. (PRTS) navigate a challenging auto parts market while executing a pivot toward profitability? You need to look beyond the top-line dip to see the strategic shift: while net sales for the third quarter of 2025 were $127.8 million, down 12% year-over-year, the company secured a critical $35.7 million strategic investment in September 2025 to enhance logistics and product range. This move, coupled with an improved gross margin of 33.1% in Q3 2025, shows a laser-focus on margin over volume, which is a key signal for any investor or business strategist. Are they building a durable, free cash flow-positive model, or is this a temporary fix? Keep reading to see the history, ownership, and business model that underpins this high-stakes strategy.
CarParts.com, Inc. (PRTS) History
Given Company's Founding Timeline
You want to know where a company like CarParts.com, Inc. started, and honestly, the origins are a classic story of an auto parts business spotting the internet trend early. It wasn't born in a Silicon Valley garage, but in Southern California, ready to sell car parts online before most people even trusted their credit card to a website.
Year established
The company was established in 1995, originally incorporated in California.
Original location
The initial corporate location was in Carson, California, before the headquarters eventually moved to Torrance, California.
Founding team members
The company was founded by Sol Khazani (also cited as Solomon Lee) and Mehran Nia. They laid the groundwork for what would become U.S. Auto Parts Network, Inc. before its final rebrand.
Initial capital/funding
While specific seed capital is not publicly detailed, the company's total early funding is cited at approximately $300K over its first two rounds, with the first funding round occurring in March 1999. That's a lean start for a business that now handles over a million parts.
Given Company's Evolution Milestones
| Year | Key Event | Significance |
|---|---|---|
| 1999 | Launch of the flagship e-commerce site, CarParts.com. | Established an early online presence, expanding market reach beyond traditional brick-and-mortar. |
| 2007 | Initial Public Offering (IPO) on the NASDAQ stock exchange. | Secured public funding and began trading under the ticker symbol PRTS. |
| 2020 | Corporate name officially changed to CarParts.com, Inc. | Unified the corporate identity with its primary consumer-facing brand; coincided with a massive sales increase. |
| 2020 | Revenue surged during the COVID-19 pandemic. | Net sales increased by 69% year-over-year, reaching $442.9 million, validating the e-commerce model. |
| 2025 | Strategic Investment and Board Transitions. | Completed a strategic investment from ZongTeng Group, A-Premium, and CDH Investments, signaling a push for global logistics and procurement strength. |
Given Company's Transformative Moments
The company's journey is a case study in digital transformation, but two moments truly shifted its trajectory. The first was the decision to fully embrace the CarParts.com brand, moving away from the more generic U.S. Auto Parts Network, Inc. in July 2020. This simplified the customer's mental model and helped capitalize on the second, and more dramatic, moment: the pandemic-driven surge in online auto parts sales.
That 2020 growth-a 69% jump in net sales-forced a critical, and costly, focus on logistics. Since then, the company has heavily invested in its supply chain, including a new semi-automated facility in Las Vegas, Nevada, which was expected to cost between $13 million and $15 million. This investment is key to cutting shipping times and improving the customer experience, which is the whole ballgame in e-commerce.
More recently, the strategic investment in October 2025 from major international players like ZongTeng Group and A-Premium is a clear signal of an aggressive pivot toward optimizing the supply chain and procurement model. This move comes as the company navigates a challenging market, reporting Year-to-Date (YTD) Q3 2025 Net Sales of approximately $427.1 million, with Q3 2025 net sales at $127.8 million and a gross margin of 33.1%. The focus now is defintely on margin and efficiency, not just top-line growth. To see how these moves are impacting the balance sheet, you should check out Breaking Down CarParts.com, Inc. (PRTS) Financial Health: Key Insights for Investors.
- The rebrand to CarParts.com, Inc. was a necessary simplification for the digital age.
- Supply chain investments are the company's real moat, aiming to generate approximately $10 million in annual savings.
- The 2025 strategic investment is a capital injection and a partnership for global operational strength.
CarParts.com, Inc. (PRTS) Ownership Structure
CarParts.com, Inc. is controlled by a mix of institutional investors, company insiders, and a large proportion of retail shareholders, a structure that can lead to volatility but also strong alignment on growth strategy. The company's recent $35.7 million strategic investment in early September 2025 from global industry leaders has subtly shifted the power dynamics, adding new strategic stakeholders to the mix.
CarParts.com, Inc.'s Current Status
CarParts.com, Inc. (PRTS) is a publicly traded company, listed on the Nasdaq Global Select Market (NasdaqGS). As of November 2025, its stock price was around $0.54 per share, giving it a market capitalization of approximately $35.3 million.
The company is currently in a period of strategic evaluation, exploring various alternatives, including a potential sale, to maximize shareholder value. This is a crucial near-term factor for all investors to watch.
In early September 2025, the company closed a significant strategic investment of $35.7 million from A-Premium, ZongTeng Group, and CDH Investments, which included the issuance of approximately 10.3 million new common shares and convertible notes. This investment is defintely intended to strengthen its supply chain and logistics capabilities.
CarParts.com, Inc.'s Ownership Breakdown
The ownership structure is predominantly retail, but institutional and insider holdings still represent a significant, influential block. This distribution means that while the retail investor base drives much of the trading volume, the large institutional holders and insiders can still exert considerable influence on key decisions, particularly during a strategic review. Breaking Down CarParts.com, Inc. (PRTS) Financial Health: Key Insights for Investors
| Shareholder Type | Ownership, % | Notes |
|---|---|---|
| Retail & Public Investors | 72.88% | Represents the largest block; includes individual investors and other public companies. |
| Institutional Investors | 10.26% | Key holders include Vanguard Group Inc, BlackRock, Inc., and Oaktop Capital Management II, L.P. |
| Insiders | 5.73% | This includes the management team and board of directors. CEO David Meniane directly owns 2.65% of the company's shares. |
CarParts.com, Inc.'s Leadership
The leadership team is a blend of e-commerce veterans and financial operators focused on driving profitable growth and operational efficiency, especially as the company navigates its strategic review. The average tenure for the management team is approximately 3.6 years.
- David Meniane, Chief Executive Officer (CEO): Appointed CEO and Director in April 2022, he has been instrumental in the company's operational turnaround and focuses on a people-first culture and disciplined execution.
- Ryan Lockwood, Chief Financial Officer (CFO): He hosted the company's Q3 2025 earnings call in November 2025, indicating his active role in the company's financial communication.
- Michael Huffaker, Chief Operating Officer (COO): Joined in December 2022, bringing nearly two decades of e-commerce and retail technology expertise from companies like Amazon. His focus is on ensuring a world-class customer experience and optimizing logistics.
- Kals Subramanian, Chief Technology Officer (CTO): Joined in April 2022, he has over 24 years of experience in retail technology, with a specialization in e-commerce and order management.
- Barry Phelps, Chairman of the Board: He leads the six-director board, which saw transitions in October 2025 following the strategic investment, with new board observers from the investing groups.
CarParts.com, Inc. (PRTS) Mission and Values
CarParts.com, Inc.'s core purpose transcends simply selling auto parts; their mission is to simplify the historically stressful vehicle maintenance process, driven by a vision of empowering every driver on their journey.
CarParts.com's Core Purpose
As a seasoned analyst, I look past the quarterly earnings reports to the cultural DNA, and for CarParts.com, that DNA is about a technology-driven, customer-first approach. Their operational focus-like the strategic investment of $35.7 million in September 2025 from partners like A-Premium, ZongTeng Group, and CDH Investments-is directly tied to their goal of optimizing the supply chain to deliver on their promise of affordability and speed.
Official mission statement
The company's mission is fundamentally about transforming the customer experience in the aftermarket auto parts sector. They are dedicated to improving how drivers shop for parts by providing a seamless, affordable, and reliable way to get what they need. This commitment is what separates the long-term players from the short-term opportunists.
- Simplify the automotive repair process to eliminate uncertainty and stress.
- Offer over 1 million high-quality automotive parts and accessories.
- Place the customer at the forefront with an easy-to-use, mobile-friendly website and app.
Their focus on repeat customers and the mobile app business, which now has over 1 million users, shows this mission in action.
Vision statement
The vision statement is the long-term aspiration, the guiding star for their global team. It's a powerful, empathetic statement that frames their e-commerce platform as an enabler for vehicle owners.
- Empowering Drivers Along Their Journey.
This vision is what underpins their strategic shifts, like the push for higher-margin fee income and growing their wholesale channel, even as trailing twelve-month (TTM) revenue as of November 2025 sits at $560.63 million. It's about building a sustainable, profitable model for the long haul.
CarParts.com slogan/tagline
A good slogan is a concise promise to the customer. CarParts.com uses two key phrases that translate their mission into a clear value proposition for the consumer.
- Quality Parts. Priced Right.
- Right Parts, Guaranteed.
The second one, 'Right Parts, Guaranteed,' is a direct promise that removes a major barrier to online auto parts shopping: the fear of buying the wrong part. That's defintely a smart move for an e-commerce player.
To understand the financial implications of this customer-first strategy, you should check out Exploring CarParts.com, Inc. (PRTS) Investor Profile: Who's Buying and Why?
CarParts.com, Inc. (PRTS) How It Works
CarParts.com operates as a pure-play e-commerce retailer, cutting out the traditional auto parts middleman by selling directly to you from a vertically integrated supply chain.
They make money by leveraging their proprietary technology to match over 1.5 million parts to specific vehicles, ensuring a high-confidence purchase, and then efficiently shipping those parts from their nationwide distribution network.
CarParts.com's Product/Service Portfolio
| Product/Service | Target Market | Key Features |
|---|---|---|
| Aftermarket Auto Parts (Collision & Mechanical) | Individual Consumers (DIY/DIFM) | Over 1.5 million SKUs, including private label and branded parts; focus on non-discretionary collision parts. |
| Wholesale/B2B Auto Parts | Commercial Customers (Repair Shops, Fleets) | High-touch sales model with last-mile delivery in key markets; contribution margins up to 3x higher than direct-to-consumer. |
| High-Margin Fee-Based Services | Existing Customer Base | Subscription programs like CarParts+, product protection, and roadside assistance; generating an annualized run rate of nearly $4 million as of Q3 2025. |
CarParts.com's Operational Framework
The company's operational success hinges on controlling the entire process, from sourcing to delivery, which is a massive differentiator in this space. For the first nine months of 2025, their net sales totaled approximately $427.1 million, showing the scale of this operation.
- Vertically Integrated Supply Chain: They own the supply chain, which means they are not just a drop shipper like many online competitors. This control is what allows them to manage inventory and offer competitive pricing.
- Nationwide Distribution Network: Strategically placed company-owned distribution centers, including a new semi-automated facility in Las Vegas, Nevada, reduce last-mile transportation costs and speed up delivery.
- Technology-Driven Fitment: Investments in machine learning algorithms power their search function, ensuring the part you order defintely fits your vehicle, which is crucial for reducing returns and improving customer experience.
- Mobile-First Customer Acquisition: The mobile app is a key focus for customer loyalty and repeat purchases, now contributing more than 13% of e-commerce sales as of Q3 2025.
CarParts.com's Strategic Advantages
In a commoditized industry, CarParts.com is strategically shifting its business mix to focus on higher-margin sales and customer lifetime value. This is a smart move to counteract external pressures like high tariffs and marketing costs.
- Proprietary Data and Inventory: They carry a vast catalog of parts, with a significant focus on high-demand collision parts, where they are the second largest importer in the U.S. This scale gives them purchasing power.
- Diversified Revenue Streams: The push into high-margin, fee-based income, such as the CarParts+ membership, is a direct way to monetize their 100 million annual website visitors beyond just selling a part.
- B2B Channel Expansion: Scaling their wholesale business to fleets and repair shops is a major margin-improvement strategy, as B2B sales carry significantly higher contribution margins than direct-to-consumer (DTC) sales.
- Marketing Efficiency: Growing the mobile app business and focusing on repeat customers helps them bypass expensive customer acquisition channels like Google Cost-Per-Click (CPC), which can cost up to 18% of revenue on paid search orders.
To see how this operational strategy translates into investor sentiment and market valuation, you should read Exploring CarParts.com, Inc. (PRTS) Investor Profile: Who's Buying and Why?
CarParts.com, Inc. (PRTS) How It Makes Money
CarParts.com, Inc. primarily makes money by selling new, aftermarket automotive parts and accessories directly to consumers (DTC) through its flagship website and mobile app, and secondarily through major online marketplaces.
The core of their financial engine is a streamlined, factory-to-consumer supply chain that bypasses traditional brick-and-mortar auto parts stores, allowing them to offer competitive pricing while maintaining a respectable gross margin, which was 33.1% in the third quarter of 2025.
CarParts.com's Revenue Breakdown
The company's revenue is heavily weighted toward its proprietary eCommerce channel, which offers greater control over pricing, customer experience, and data. The 'Marketplaces' channel is currently facing pressure from non-compliant, low-cost competitors, making the DTC channel a critical focus for profitable growth.
| Revenue Stream | % of Total (TTM) | Growth Trend |
|---|---|---|
| Direct-to-Consumer (DTC) eCommerce | 75% | Increasing (Strategic Focus) |
| Marketplaces and Wholesale | 25% | Decreasing (Facing Headwinds) |
Business Economics
The business model is fundamentally about inventory management and supply chain efficiency, aiming to maximize the variable contribution margin (the profit left after product cost, shipping, and variable marketing). In Q3 2025, management's focus on profitability pushed contribution margins up by over 300 basis points, even as net sales fell.
- Private Label Margin: The key to margin protection is the company's private label brands (like Kool-Vue and Evan Fischer), which typically deliver mid-50% product margins, significantly higher than branded parts.
- Tariff Headwinds: A major cost pressure is the high tariff environment, with products sourced from China and Taiwan subject to tariffs ranging from 25% to 75%.
- Strategic Partnerships: A recent $35.7 million strategic investment from A-Premium, ZongTeng Group, and CDH Investments is expected to immediately boost the top line. The A-Premium partnership, for instance, is already generating an annualized run rate of about $20 million and could scale to over $100 million by expanding the product catalog by over 100,000 new Stock Keeping Units (SKUs).
- Fee Income: They are actively monetizing their customer base by adding high-margin fee income, such as the CarParts+ and Roadside Assistance Memberships, which had reached over 8,000 members by Q3 2025 with an annualized fee-income run rate near $4 million.
Here's the quick math on the strategic shift: cutting back on unprofitable paid marketing, even if it means sacrificing top-line revenue-Q3 2025 net sales were $127.8 million, down 12% year-over-year-is a deliberate move to improve the bottom line and achieve sustained free cash flow.
You can see this focus on ownership and strategic investment reflected in the capital structure, which is a good signal. Exploring CarParts.com, Inc. (PRTS) Investor Profile: Who's Buying and Why?
CarParts.com's Financial Performance
As of November 2025, the company is in a transition phase, prioritizing profitability and operational efficiency over pure revenue growth, which is why the Trailing Twelve-Month (TTM) revenue is around $560.63 million. The goal is clear: disciplined execution to drive free cash flow positivity in 2026.
- Revenue Trend: Net sales were mixed in 2025, with Q1 at $147.4 million (down 11% YoY) and Q2 at $151.9 million (up 5% YoY), before the strategic marketing rationalization drove Q3 net sales down to $127.8 million.
- Profitability Metrics: The company reported a GAAP net loss of ($10.9) million in Q3 2025, and an Adjusted EBITDA loss of ($2.2) million. This still shows a loss, but the sequential improvement in gross margin from 32.1% in Q1 to 33.1% in Q3 is a positive sign of their cost-mitigation efforts.
- Balance Sheet Health: The company ended Q3 2025 with a cash balance of $36.0 million and an inventory balance of $94.3 million, indicating a solid, though not excessive, liquidity position to support its supply chain.
- Cost-Cutting Actions: Management has enacted a restructuring plan, including a facility closure and headcount reduction, projected to generate approximately $10 million in annualized cost savings.
What this estimate hides is the potential volatility from the marketplaces channel, which is subject to intense, low-margin competition, but the pivot to the higher-margin DTC and private label strategy is defintely the right long-term move.
CarParts.com, Inc. (PRTS) Market Position & Future Outlook
CarParts.com is strategically shifting its focus from top-line growth to profitable e-commerce, a necessary pivot given its small share in the massive US auto parts market and its recent financial pressures, including a Q2 2025 net loss of $12.7 million. The company's future hinges on successfully scaling its high-margin B2B channel and leveraging a recent $35 million strategic investment to optimize its supply chain and digital platform.
Competitive Landscape
In the highly fragmented US aftermarket, CarParts.com competes directly with massive omnichannel retailers and pure-play e-commerce rivals. Its online-native model offers a distinct advantage in product variety and price, but it still represents a small fraction of the total market, which is dominated by the big-box, brick-and-mortar players.
| Company | Market Share, % (Online Clicks Proxy) | Key Advantage |
|---|---|---|
| CarParts.com | 3.9% | Pure-play e-commerce, vast digital catalog, and proprietary fitment data. |
| AutoZone | 16.4% | Commercial (DIFM) dominance, national Mega-Hub network for rapid delivery, and strong private-label brand (Duralast). |
| Advance Auto Parts | 12.3% | Extensive retail footprint, strong brand recognition, and professional segment focus (e.g., Worldpac). |
Here's the quick math: While CarParts.com's TTM revenue is around $560 million, industry giants like AutoZone and O'Reilly Automotive boast market capitalizations of $64.15 billion and $83.76 billion, respectively, as of November 2025, reflecting their dominant physical presence and professional installer (Do-It-For-Me or DIFM) business. The online click-share data shows CarParts.com is a defintely a serious contender in the digital acquisition space, but the revenue gap is immense.
Opportunities & Challenges
The company is navigating a difficult period of margin compression and cash burn, but its strategic initiatives for 2025 offer a clear path to potential profitability by focusing on higher-margin sales and operational efficiency.
| Opportunities | Risks |
|---|---|
| Scale the B2B Wholesale Channel with last-mile delivery, which offers contribution margins up to three times higher than e-commerce. | Nasdaq Compliance: Received a deficiency notice, requiring the stock to trade above $1.00 by December 10, 2025, to maintain listing. |
| Monetize the 100 million annual website visits and customer list with high-margin fee income (e.g., warranties, memberships). | Tariff Volatility: Approximately 20% of private-label products are imported from China, exposing margins to ongoing trade and customs risks. |
| Strategic Investment: The $35 million investment from ZongTeng Group and A-Premium provides capital and deepens ties to global supply chain and procurement expertise. | Liquidity & Cash Burn: Operating cash flow used $20.06 million year-to-date in 2025, with a cash balance of $19.8 million as of Q2 2025, creating a tight liquidity situation. |
Industry Position
CarParts.com is positioned as a leading pure-play e-commerce disruptor in the massive, but highly fragmented, $175-200 billion US aftermarket auto parts sector. The company's core value proposition is its technology-led approach, offering a comprehensive catalog of over 1 million parts and accessories, primarily focused on the Do-It-Yourself (DIY) customer.
- Own a vertically integrated supply chain, which helps maintain pre-freight margins over 50%.
- The mobile app is a key growth vector, now accounting for 12% of e-commerce revenue and exceeding 1 million users, driving repeat purchases and higher customer lifetime value.
- The company is actively exploring strategic alternatives, a process that concluded with the September 2025 investment, signaling a commitment to maximizing long-term shareholder value.
For a deeper dive into the foundational principles driving this strategy, you should review the company's core beliefs: Mission Statement, Vision, & Core Values of CarParts.com, Inc. (PRTS).
Finance: Monitor Q4 2025 cash flow and the Nasdaq compliance status closely, as both are critical near-term indicators.
CarParts.com, Inc. (PRTS) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Disclaimer
All information, articles, and product details provided on this website are for general informational and educational purposes only. We do not claim any ownership over, nor do we intend to infringe upon, any trademarks, copyrights, logos, brand names, or other intellectual property mentioned or depicted on this site. Such intellectual property remains the property of its respective owners, and any references here are made solely for identification or informational purposes, without implying any affiliation, endorsement, or partnership.
We make no representations or warranties, express or implied, regarding the accuracy, completeness, or suitability of any content or products presented. Nothing on this website should be construed as legal, tax, investment, financial, medical, or other professional advice. In addition, no part of this site—including articles or product references—constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any securities, franchises, or other financial instruments, particularly in jurisdictions where such activity would be unlawful.
All content is of a general nature and may not address the specific circumstances of any individual or entity. It is not a substitute for professional advice or services. Any actions you take based on the information provided here are strictly at your own risk. You accept full responsibility for any decisions or outcomes arising from your use of this website and agree to release us from any liability in connection with your use of, or reliance upon, the content or products found herein.