What happened Shares of Vroom (NASDAQ: VRM), a used vehicle e-commerce platform offering a digital approach to buying used vehicles, jumped as much as 15.2% higher Tuesday morning after competitor Carvana announced it expected record results in the third quarter. So what Vroom and Carvana share many business strengths, including that the two business models were ideal to serve customers at a time of social distancing while most auto stocks struggled. The COVID-19 pandemic has almost certainly accelerated consumers' adoption of online car buying, and with Carvana announcing it expects records in total revenue, retail units sold, EBITDA margin, and gross profit per unit (GPU) for the third quarter, investors are betting that Vroom is seeing much of the same demand strength. In a vote of confidence, Goldman Sachs upgraded ratings of Vroom and Carvana from neutral to buy: "We continue to see dynamics surrounding COVID-19 accelerating the shift online in used autos, but beyond that we expect Carvana and Vroom to drive the shift online by leveraging national scale to aggregate demand in a highly fragmented market and take share from the long-tail of small dealers and peer-to-peer market," noted Goldman Sachs analyst Daniel Powell and his team. Image source: Getty Images. Now what Both Vroom and Carvana have proven their business model was built to thrive during social distancing requirements, but one knock against the companies is that their rapid expansion meant they were rapidly burning through cash. The next step for both companies will be to optimize their business and scale to reach profitability. Investors are intrigued with Vroom's prospects, especially considering how similar it is to Carvana, and the fact that Carvana's stock price has risen an incredible 1,220% over the past three years. However, Vroom has much work to do if it is to follow in those footsteps, and even Carvana has yet to turn a profit. 10 stocks we like better than Vroom, Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Vroom, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of August 1, 2020 Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source