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TrueCar (TRUE)
NASDAQ:TRUE
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TrueCar
(NASDAQ:TRUE)48Neutral
Positive Factors
Balance Sheet
TRUE had $111MM of cash at the end of 4Q24 with no debt, indicating a strong balance sheet.
Digital Retail Platform
TrueCar announced progress on its digital retail platform TrueCar+, leading to a significant increase in volumes and consumer engagement.
Negative Factors
Financial Performance
TRUE's 4Q24 results showed a miss on revenue and EBITDA compared to estimates, indicating underperformance in key financial metrics.
Partnership Transition
The transition from American Express to new affinity partners is likely to result in subdued revenue growth, contributing to a deceleration in growth momentum.
Revenue Guidance
1Q25 guidance was short of expectations, pressuring shares in the aftermarket by over 10%.
TrueCar (TRUE) vs. S&P 500 (SPY)
Market Cap
$188.47M
Dividend YieldN/A
Average Volume (3M)373.41K
Price to Earnings (P/E)―
Beta (1Y)2.34
Revenue Growth10.64%
EPS Growth38.48%
CountryUS
Employees325
SectorCommunication Services
Sector Strength85
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)-0.34
Shares Outstanding87,256,035
10 Day Avg. Volume351,536
30 Day Avg. Volume373,408
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.48
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.31Price Target Upside104.27% Upside
Rating ConsensusModerate Buy
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.45
Neutral
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
Neutral
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.50
Neutral
| 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
2.11
Price Trends
3.21
Negative
3.62
Negative
3.38
Negative
Market Momentum
-0.35
Positive
23.55
Positive
10.10
Positive
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 2.11 is below the 20-day moving average (MA) of 2.70, below the 50-day MA of 3.21, and below the 200-day MA of 3.38, indicating a bearish trend. The MACD of -0.35 indicates Positive momentum. The RSI at 23.55 is Positive, neither overbought nor oversold. The STOCH value of 10.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TRUE.
TrueCar Risk Analysis
TrueCar disclosed 59 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $8.33B | 10.71 | 12.47% | 0.66% | 16.75% | -18.09% | |
70 Outperform | $39.83B | 119.87 | 27.94% | ― | 26.94% | -57.49% | |
66 Neutral | $2.22B | 46.74 | 4.80% | ― | 6.47% | ― | |
63 Neutral | $6.81B | 10.14 | 29.65% | ― | -0.68% | -25.24% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
55 Neutral | $3.39B | 171.74 | 3.62% | ― | -2.17% | -26.53% | |
48 Neutral | $188.47M | ― | -22.31% | ― | 10.64% | 38.48% |
* Communication Services Sector Average
Performance Comparison
TRUE
TrueCar
2.11
-1.56
-42.51%
AN
AutoNation
171.07
22.69
15.29%
KAR
Kar Auction Services
21.32
5.42
34.09%
LAD
Lithia Motors
304.96
23.73
8.44%
CVNA
Carvana Co
188.47
110.37
141.32%
CARG
CarGurus
31.65
8.65
37.61%
TrueCar Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -35.28% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
TrueCar, Inc. experienced significant growth in revenue, unit sales, and operational efficiency, driven by strategic initiatives such as the launch of TC Plus and AI integration. However, challenges remain in achieving positive free cash flow and managing dealer churn, especially among independents. The outlook for 2025 is optimistic with planned investments to drive further growth.Highlights
Record Revenue Growth
Revenue of $175.6 million grew by $16.9 million or 10.6% year-over-year, marking the strongest annual revenue growth since 2017.
Improvement in EBITDA and Cash Flow
Adjusted EBITDA of $1.6 million grew by $15.43 million year-over-year. Cash flow from operations increased by $30.1 million year-over-year.
Increase in Unit Sales
Total unit sales of 356,000 increased by 37,300 or 11.7% year-over-year, with new vehicle unit sales up 15.6%.
Launch of TC Plus
Introduced the first digital marketplace enabling online transactions for new, used, and certified pre-owned vehicles.
Dealer Network Expansion
Franchise dealer count grew by 119 dealers, a 1.4% year-over-year increase, with positive momentum across multiple business areas.
AI and Machine Learning Integration
Significant investments in AI and machine learning models led to enhanced consumer insights and improved lead conversion rates.
Lowlights
Negative Free Cash Flow
Although improved, free cash flow was still negative at $0.2 million.
Challenges with Independent Dealers
Higher churn rates in independent dealers due to macroeconomic factors and less sophisticated operations.
Modest Q1 Revenue Growth Expected
Guidance for Q1 indicates high single-digit revenue growth and negative adjusted EBITDA of approximately $5 million due to headcount investments and loss of American Express incentives.
Company Guidance
During the TrueCar, Inc. fourth quarter 2024 financial results conference call, the company provided guidance reflecting an optimistic outlook for 2025, expecting over 20% year-over-year revenue growth. The CEO, Jantoon Reigersman, highlighted several metrics from 2024, including a 10.6% increase in annual revenue to $175.6 million, adjusted EBITDA growth to $1.6 million, and cash flow from operations improvement by $30.1 million. Free cash flow improved by $34.1 million, despite remaining slightly negative at -$0.2 million. The company saw a 27.8% growth in new vehicle unit sales in Q4, contrasting with the industry’s 9.6% growth. TrueCar plans to expand its TC Plus digital marketplace and deepen dealer management system integrations in 2025. The company anticipates a $300 million annual revenue run rate with a 10% free cash flow margin by 2026. However, Q1 2025 guidance indicates modest high single-digit revenue growth and a negative adjusted EBITDA of approximately $5 million, attributed to seasonal payroll expenses and strategic headcount increases in dealer sales and service teams.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.