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TrueCar Inc (TRUE)
:TRUE
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TrueCar
(NASDAQ:TRUE)
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Rating:48Neutral
Price Target:
$2.00
▲(1.01% Upside)
TrueCar's overall stock score reflects significant financial challenges, particularly in profitability and cash flow management, despite some positive developments in revenue growth and strategic initiatives. Technical indicators and valuation metrics also present concerns, while the earnings call provides a cautiously optimistic outlook.
Positive Factors
Revenue Growth
TrueCar's consistent revenue growth indicates strong market demand and effective business strategies, enhancing its competitive position.
Product Enhancements
Innovative product enhancements improve user experience and engagement, potentially increasing customer retention and dealer satisfaction.
OEM Revenue Increase
Strong OEM revenue growth reflects successful partnerships and enhances TrueCar's revenue diversification and stability.
Negative Factors
Negative Profitability
Persistent negative profitability indicates challenges in cost management and operational efficiency, impacting long-term financial health.
Adjusted EBITDA Challenges
Negative adjusted EBITDA highlights ongoing operational inefficiencies, which could hinder future profitability and cash flow improvements.
Dealer Turnover
High dealer turnover raises concerns about network stability and may impact TrueCar's ability to maintain and grow its dealer base.
TrueCar (TRUE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$175.11M
Dividend YieldN/A
Average Volume (3M)378.83K
Price to Earnings (P/E)―
Beta (1Y)2.16
Revenue Growth11.66%
EPS Growth-4.69%
CountryUS
Employees348
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)-0.05
Shares Outstanding88,441,490
10 Day Avg. Volume406,502
30 Day Avg. Volume378,834
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.48
Enterprise Value/Revenue0.46
Enterprise Value/Gross Profit0.54
Enterprise Value/Ebitda-5.33
Forecast
1Y Price Target
$2.63Price Target Upside32.83% Upside
Rating ConsensusHold
Number of Analyst Covering4
TrueCar Business Overview & Revenue Model
Company DescriptionTrueCar, Inc. operates as an internet-based information, technology, and communication services company in the United States. It operates its platform on the TrueCar website and mobile applications. Its platform enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar certified dealers. The company also offers forecast and consulting services regarding determination of the residual value of an automobile at given future points in time, which are used to underwrite automotive loans and leases, and by financial institutions to measure exposure and risk across loan, lease, and fleet portfolios. In addition, it provides accurate, geographically specific, and real-time pricing information for consumers and dealers; TrueCar Trade, which gives consumers information on the value of their trade-in vehicles and enables them to obtain a guaranteed trade-in price before setting foot in the dealership; and DealerScience that provides dealers with advanced digital retailing software tools. The company was formerly known as Zag.com Inc. TrueCar, Inc. was incorporated in 2005 and is headquartered in Santa Monica, California.
How the Company Makes MoneyTrueCar generates revenue mainly through its subscription and transaction-based models. The company earns money by charging automotive dealers a subscription fee for access to its platform, where they can gain leads and potential sales from customers. Additionally, TrueCar earns transaction fees when a vehicle is sold through its platform, which is typically a percentage of the sale price. The company also collaborates with various automotive manufacturers and financial institutions, which can provide additional revenue streams through partnerships and advertising arrangements. These relationships enhance TrueCar's market presence and contribute to its overall earnings.
TrueCar Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
The earnings call presented several positive developments, including revenue growth, reduced net loss, and strategic advancements in product offerings and technology integrations. However, the company faces ongoing challenges with adjusted EBITDA, dealer turnover, and macroeconomic uncertainties affecting revenue projections. The positive aspects slightly outweigh the negatives, indicating a cautiously optimistic outlook.Q2-2025 Updates
Positive Updates
Revenue Growth
Total revenue of $47 million grew by $5.2 million, up 12.4% year-over-year, marking the highest quarterly revenue since Q3 2021.
Reduction in Net Loss
Net loss decreased to negative $7.6 million from negative $13.5 million in the same period last year.
OEM Revenue Increase
OEM revenue of $3.6 million grew by $0.6 million or 19.7% year-over-year.
New Unit Sales Growth
New unit sales volume grew 6.2% year-over-year, outperforming the industry's 2.8% growth in new vehicle retail sales.
Product Enhancements and Launches
Launch of Actionable Insights and motivated buyer badging features to improve lead quality and engagement. Redesign of the consumer experience, including the search results page and vehicle detail page, to enhance usability.
TC+ Advancements
Progress towards commercializing TrueCar+ by year-end, including completion of CDK's DMS integration and redesigned consumer checkout flow, leading to a 115% increase in add-to-cart rate.
Strategic Initiatives
Focus on expanding dealer network, growing OEM partnerships, and commercializing TrueCar+ to drive future growth.
Negative Updates
Adjusted EBITDA
Adjusted EBITDA came in at negative $1.2 million, indicating ongoing operational challenges.
Franchise Dealer Turnover
44 franchise dealers turned over in the quarter, raising concerns about network stability.
Challenges with Dealer Engagement
Dealer engagement with new features requires a significant education process, indicating a gap in adoption and utilization.
Uncertainty in Revenue Trajectory
Macroeconomic uncertainty and auto tariffs present challenges to predicting revenue growth.
Company Guidance
During TrueCar's Second Quarter 2025 Financial Results Conference Call, several key metrics and strategic initiatives were highlighted. Total revenue for the quarter was reported at $47 million, representing a 12.4% increase year-over-year, marking the highest quarterly revenue since Q3 2021. The company's net loss decreased to $7.6 million, down from $13.5 million the previous year. Additionally, adjusted EBITDA stood at negative $1.2 million. OEM revenue grew by 19.7% year-over-year to $3.6 million, while new unit sales volume increased by 6.2%, outpacing the industry's growth of 2.8% in new vehicle retail sales. The prospect close rate reached its highest level since Q2 2021, attributed to a nearly 30% year-over-year improvement in average cost per sale for non-affinity partner units due to restructured performance marketing campaigns. The company emphasized its focus on enhancing the TrueCar+ platform, with significant advancements such as the launch of Actionable Insights and motivated buyer badging to improve dealer and consumer experiences. TrueCar also reported a 115% increase in add-to-cart rates and a 40% lift in daily credit application submissions following the rollout of TC+ enhancements. Looking ahead, TrueCar aims to commercialize TrueCar+ by year-end and expects to achieve adjusted EBITDA profitability and positive free cash flow over the second half of 2025.TrueCar Financial Statement Overview
Summary
TrueCar faces financial pressure with ongoing losses and modest revenue growth. The balance sheet is stable with low leverage, but negative cash flow trends highlight liquidity issues. Improvements in operational efficiencies and revenue growth are critical for future financial health.Income Statement
TrueCar's TTM data shows a slight revenue increase to $179M but remains unprofitable with a net loss of $35M, reflecting a challenging margin environment. The TTM gross profit margin is strong at 85.3%, but negative EBIT and EBITDA margins indicate significant operational challenges. Revenue growth over the past year is modest at 2.1%, showing slight recovery but not enough to offset persistent losses.45
Neutral
Balance Sheet
The balance sheet shows a stable equity position with a debt-to-equity ratio of 0.10, indicating low leverage and financial flexibility. The equity ratio of 76.6% suggests a strong capital structure. However, declining stockholders' equity and total assets over recent years pose potential risks to long-term stability.50
Neutral
Cash Flow
Cash flow analysis reveals negative operating cash flow and free cash flow in TTM, indicating liquidity issues. Free cash flow declined significantly, and the company faces challenges in converting operational performance into cash. The free cash flow to net income ratio is negative, reflecting difficulties in generating cash from operations.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 184.56M | 175.60M | 158.71M | 161.52M | 231.70M | 278.68M |
| Gross Profit | 157.15M | 149.21M | 142.85M | 145.31M | 209.46M | 257.13M |
| EBITDA | -15.90M | -18.17M | -35.79M | -45.46M | -17.59M | 6.11M |
| Net Income | -29.44M | -31.05M | -49.77M | -118.69M | -38.37M | 76.54M |
Balance Sheet | ||||||
| Total Assets | 139.82M | 159.69M | 204.32M | 251.53M | 387.67M | 458.06M |
| Cash, Cash Equivalents and Short-Term Investments | 92.52M | 111.83M | 136.96M | 175.52M | 245.22M | 273.31M |
| Total Debt | 10.39M | 11.28M | 14.41M | 23.01M | 31.55M | 36.74M |
| Total Liabilities | 33.46M | 41.55M | 44.10M | 54.26M | 57.88M | 75.28M |
| Stockholders Equity | 106.36M | 118.14M | 160.22M | 197.27M | 329.79M | 383.93M |
Cash Flow | ||||||
| Free Cash Flow | -11.39M | -159.00K | -34.22M | -40.82M | 3.50M | 28.84M |
| Operating Cash Flow | -3.07M | 7.70M | -22.41M | -29.14M | 14.19M | 39.12M |
| Investing Cash Flow | -8.32M | -7.86M | -11.81M | -8.03M | -4.21M | 101.90M |
| Financing Cash Flow | -24.05M | -24.97M | -4.33M | -32.53M | -38.09M | -49.24M |
TrueCar Technical Analysis
Negative
1.98
Price Trends
2.04
Negative
1.84
Positive
2.25
Negative
Market Momentum
0.03
Positive
43.23
Neutral
4.59
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 1.98 is below the 20-day moving average (MA) of 2.20, below the 50-day MA of 2.04, and below the 200-day MA of 2.25, indicating a bearish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 43.23 is Neutral, neither overbought nor oversold. The STOCH value of 4.59 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 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
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $3.58B | 17.06 | 7.48% | 5.92% | -7.06% | -20.71% | |
75 Outperform | $1.68B | 23.41 | 8.43% | 4.14% | 29.62% | -19.65% | |
74 Outperform | $863.53M | 19.05 | 27.34% | ― | 92.91% | ― | |
73 Outperform | $3.72B | 30.21 | 29.80% | ― | 4.80% | ― | |
60 Neutral | $3.23B | -40.42 | -10.81% | ― | 25.76% | 27.05% | |
48 Neutral | $175.11M | ― | -23.53% | ― | 11.66% | -4.69% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
TRUE
TrueCar
1.98
-1.47
-42.61%
ATHM
AutoHome
29.04
-2.17
-6.95%
CARG
CarGurus
37.50
7.47
24.88%
EVER
EverQuote
23.65
2.56
12.14%
OPRA
Opera
18.82
3.98
26.82%
GENI
Genius Sports Limited
12.75
4.91
62.63%
TrueCar Corporate Events
Executive/Board Changes
TrueCar Announces Termination of Chief Revenue Officer
Neutral
Aug 29, 2025
On August 28, 2025, TrueCar, Inc. announced the termination of its Chief Revenue Officer, Jay Ku, effective September 1, 2025, without cause. The company plans to enter into a release and separation agreement with Mr. Ku, which includes severance benefits in line with his employment agreement.
The most recent analyst rating on (TRUE) stock is a Hold with a $2.00 price target. To see the full list of analyst forecasts on TrueCar stock, see the TRUE Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.