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TrueCar (TRUE)
NASDAQ:TRUE
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TrueCar
(NASDAQ:TRUE)
46Neutral
Positive Factors
Financial Stability
TrueCar has a cash balance of over $1 per share, indicating financial stability.
Sales Growth
New unit sales volume saw a significant increase of 23% year-over-year, substantially outpacing the industry’s 7% growth in new vehicle retail sales.
Technology and Innovation
TRUE launched generative AI and machine learning models that will enhance insights TRUE can provide dealers and improve the consumer shopper experience.
Negative Factors
Growth Challenges
A disappointing quarter and guidance have created uncertainty about the company's recovery in growth and profitability amid slowing cycle tailwinds.
Market Uncertainty
The company is withdrawing its outlook for accelerated growth and margin expansion due to uncertainty from newly implemented automotive sector tariffs.
Revenue Guidance
TRUE shares were under pressure primarily due to 1Q25 revenue guidance that was light on the top-line and also called for an unexpected Adjusted EBITDA loss of $5MM.
TrueCar (TRUE) vs. S&P 500 (SPY)
Market Cap
$136.53M
Dividend YieldN/A
Average Volume (3M)374.40K
Price to Earnings (P/E)―
Beta (1Y)2.05
Revenue Growth10.64%
EPS Growth38.48%
CountryUS
Employees348
SectorCommunication Services
Sector Strength84
IndustryInternet Content & Information
Share Statistics
EPS (TTM)-0.08
Shares Outstanding87,516,235
10 Day Avg. Volume322,475
30 Day Avg. Volume374,401
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.65
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.51
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.88Price Target Upside113.33% Upside
Rating ConsensusHold
Number of Analyst Covering5
TrueCar Business Overview & Revenue Model
Company DescriptionTrueCar, Inc. (TRUE) is an automotive pricing and information website aimed at transforming the car buying experience for consumers and dealers. Operating in the digital automotive retail sector, TrueCar provides a comprehensive platform that offers data-driven insights into vehicle pricing, enabling consumers to make informed purchasing decisions. The core service includes a price comparison tool that aggregates information on new and used car prices from a network of certified dealers, allowing users to understand market trends and negotiate better deals.
How the Company Makes MoneyTrueCar primarily generates revenue through fees paid by its network of certified dealers. These dealers pay TrueCar a subscription fee for the leads generated from the platform, and in some cases, a performance-based fee when a sale is completed. Additionally, TrueCar partners with various financial institutions and insurance companies, offering their services to users on the platform, which also contributes to its revenue. The company's model emphasizes creating a transparent and efficient car buying process, which in turn attracts more users and dealers to the platform, further enhancing its revenue potential.
TrueCar Financial Statement Overview
Summary
TrueCar faces significant financial challenges, marked by declining revenues and persistent losses. Strength lies in its strong gross margins and manageable debt levels. However, the company must address negative free cash flow and improve its bottom line to ensure long-term sustainability.Income Statement
TrueCar has experienced declining revenue over the past few years, with a slight rebound in the most recent year. The gross profit margin remains high, but continued negative EBIT and net margins indicate ongoing operational challenges. The revenue growth rate is negative, highlighting a persistent struggle to grow top-line sales.―
Balance Sheet
TrueCar maintains a solid equity base relative to its debt, with an improving equity ratio, indicating financial stability. However, the consistent decrease in stockholders' equity and high debt-to-equity ratio imply potential risks if revenue and profitability do not improve.55
Cash Flow
TrueCar's cash flow from operations has improved recently, turning positive, which is a positive sign. However, free cash flow remains negative, indicating challenges in generating sufficient cash after capital expenditures. The operating cash flow to net income ratio is positive, suggesting some level of operational efficiency.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 175.60M | 158.71M | 161.52M | 231.70M | 278.68M | Gross Profit |
| 149.21M | 142.85M | 145.31M | 209.46M | 257.13M | EBIT |
| -37.18M | -56.47M | -6.14M | -33.48M | -1.99M | EBITDA |
| -18.17M | -35.79M | -45.46M | -17.59M | 6.11M | Net Income Common Stockholders |
| -31.05M | -49.77M | -118.69M | -38.37M | -19.84M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 111.83M | 136.96M | 175.52M | 245.22M | 273.31M | Total Assets |
| 159.69M | 204.32M | 251.53M | 387.67M | 458.06M | Total Debt |
| 11.28M | 14.41M | 23.01M | 31.55M | 36.74M | Net Debt |
| -100.56M | -122.56M | -152.50M | -213.66M | -236.57M | Total Liabilities |
| 41.55M | 44.10M | 54.26M | 57.88M | 74.13M | Stockholders Equity |
| 118.14M | 160.22M | 197.27M | 329.79M | 383.93M |
| Cash Flow | Free Cash Flow | |||
| -159.00K | -34.22M | -40.82M | 3.50M | 28.84M | Operating Cash Flow |
| 7.70M | -22.41M | -29.14M | 14.19M | 39.12M | Investing Cash Flow |
| -7.86M | -11.81M | -8.03M | -4.21M | 101.90M | Financing Cash Flow |
| -24.97M | -4.33M | -32.53M | -38.09M | -49.24M |
TrueCar Technical Analysis
Negative
1.35
Price Trends
1.71
Negative
2.63
Negative
3.08
Negative
Market Momentum
-0.07
Negative
37.83
Neutral
52.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRUE, the sentiment is Negative. The current price of 1.35 is below the 20-day moving average (MA) of 1.44, below the 50-day MA of 1.71, and below the 200-day MA of 3.08, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 37.83 is Neutral, neither overbought nor oversold. The STOCH value of 52.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TRUE.
TrueCar Risk Analysis
TrueCar disclosed 58 risk factors in its most recent earnings report. TrueCar reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TrueCar Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $838.11M | 22.57 | 32.17% | ― | 113.43% | ― | |
80 Outperform | $1.56B | 23.70 | 9.18% | 4.48% | 26.71% | -23.67% | |
75 Outperform | $2.72B | ― | -7.25% | ― | 22.90% | 49.04% | |
74 Outperform | $3.36B | 14.70 | 6.76% | 6.25% | -3.42% | -14.23% | |
59 Neutral | $13.74B | 7.33 | -2.74% | 3.82% | 2.18% | -37.91% | |
56 Neutral | $2.78B | 154.59 | 3.62% | ― | -2.17% | -26.53% | |
46 Neutral | $136.53M | ― | -22.31% | ― | 10.64% | 38.48% |
* Communication Services Sector Average
Performance Comparison
TRUE
TrueCar
1.35
-1.53
-53.13%
ATHM
AutoHome
26.51
1.18
4.66%
CARG
CarGurus
27.95
5.34
23.62%
EVER
EverQuote
23.18
-2.11
-8.34%
OPRA
Opera
17.16
4.06
30.99%
GENI
Genius Sports Limited
10.52
5.10
94.10%
TrueCar Earnings Call Summary
Earnings Call Date:May 05, 2025
(Q1-2025)
| % Change Since: -8.78%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue and sales growth, expansion of partnerships, and promising progress with the TC+ initiative. However, it also raised concerns about ongoing negative EBITDA, the impact of new tariffs on costs and market uncertainty, delays in crucial system integration, and a lack of financial guidance due to these uncertainties.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Total revenue for Q1 2025 was $44.8 million, representing a 9.2% increase year-over-year.
Significant Increase in New Unit Sales
New unit sales volumes increased by 23% year-over-year, substantially outpacing the industry's 6.8% growth.
Expansion of Affinity Network
TrueCar added notable partners including DoorDash, GasBuddy, and GovX to its affinity network.
Progress with TC+
The pilot project with TC+ showed promising results, with a third of the pilot dealer group's sales driven by TC+ consumers who completed significant portions of the purchase online.
Efficient Performance Marketing Campaigns
Achieved the lowest cost per sale since 2022, driving unit sales growth for dealer partners.
Negative Updates
Adjusted EBITDA Remains Negative
Adjusted EBITDA was negative $3.8 million for the first quarter of 2025.
Impact of Tariffs on Automotive Sector
The introduction of 25% tariffs on imported vehicles and parts is expected to add approximately $4,500 in additional costs per new vehicle, creating uncertainty in the industry.
Delay in TC+ Backend Integration
Completion of backend integration with dealer management systems CDK and Tekion has been delayed due to prioritization of external resources outside TrueCar's control.
No Financial Guidance Provided
Due to market uncertainty, TrueCar has decided not to provide financial guidance for Q2 and beyond.
Company Guidance
During the TrueCar First Quarter 2025 Financial Results Conference Call, the company reported total revenue of $44.8 million, a 9.2% year-over-year increase, despite a negative adjusted EBITDA of $3.8 million. New unit sales volumes surged by 23%, significantly surpassing the industry's 6.8% growth in new vehicle retail sales. TrueCar expanded its affinity network with partners like DoorDash, GasBuddy, and GovX and transitioned OEM incentives from American Express to the AAA auto buying site. The company also highlighted the progress of its TC+ product, aiming for broad scalability by year-end. However, due to the uncertainty introduced by new tariffs, the company refrained from providing financial guidance for the second quarter, focusing instead on maintaining flexibility to manage potential impacts.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.