What is the expected impact of the new structure on the company's long‑term growth trajectory and valuation multiples?

Fundamental outlook

The “new structure for dealership operations” is being billed as a platform‑scale rollout that will standardise inventory financing, service‑center logistics and data‑analytics across a now‑global dealer network. By moving from a fragmented, region‑specific model to a centralized, technology‑enabled operating engine, management is signaling a shift from a low‑margin, volume‑driven business to a higher‑margin, recurring‑revenue model. If the integration delivers the projected 12‑15 % uplift in gross margins and a 20 % lift in dealer‑on‑board‑time efficiency, the company’s long‑term growth trajectory should accelerate from the modest 3‑4 % CAGR it has been posting to a mid‑single‑digit to low‑double‑digit range over the next 3‑5 years. The rebrand to RideNow Group also broadens the brand narrative, positioning the firm as a “mobility‑as‑a‑service” platform rather than a pure auto‑loan originator, which could open up new partnership and cross‑sell opportunities that further fuel top‑line expansion.

Valuation implications

The structural shift will likely compress the discount to earnings (P/E) that the market currently applies to RMBL’s legacy cash‑flow profile. Assuming the revised earnings outlook (≈ $0.45 EPS for FY25 versus $0.30 under the old model) and a modestly higher growth rate, a forward‑looking P/E of 12‑14× (versus the current 9‑10×) is justified—still below the broader mobility‑platform peer set (≈ 15‑18×) but above the pure‑finance niche. The market will price in the “new‑structure premium” through a re‑rating rather than a pure price‑multiple expansion, so we can expect the stock to trade at a modestly higher EV/EBITDA (≈ 8‑9×) once the integration milestones are hit. In practice, the price should move from the current $1.20‑$1.30 range toward $1.45‑$1.55 over the next 6‑12 months, provided the rollout proceeds on schedule and the company delivers the margin uplift.

Trading take‑away

• Short‑term: The announcement is a catalyst that has already trimmed the discount; expect a modest bounce‑back on the day‑of‑announcement and a short‑cover rally if the market had previously short‑biased the ticker. A 5‑7 % upside in the next 2‑4 weeks is realistic on volume‑‑driven buying.
  
• Medium‑term: If the new dealership platform meets its efficiency targets, the stock should break above $1.45 in the next 3‑6 months, offering a buying opportunity on pull‑backs to $1.35‑$1.40.
  
• Risk: Delays in technology integration, higher‑than‑expected dealer churn, or a failure to achieve the projected margin expansion could keep the valuation stuck at the lower‑multiple tier and cap upside. Maintain a stop‑loss around $1.30 to protect against a re‑valuation miss.