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TrueCar (TRUE)
NASDAQ:TRUE

TrueCar (TRUE) AI Stock Analysis

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TrueCar

(NASDAQ:TRUE)

Rating:52Neutral
Price Target:
$2.00
▲(4.71%Upside)
TrueCar's stock reflects a mixed outlook with financial and operational challenges being the most significant concerns. Despite positive sales growth and strategic partnerships, profitability and liquidity issues, coupled with valuation concerns, weigh heavily on the stock's attractiveness.
Positive Factors
Dealer Engagement
TRUE continues to make progress in its core business, new vehicle lead generation, adding franchise dealers back to the TRUE platform at a modest pace and driving increasing new vehicle transactions per franchise dealer.
Financial Stability
TrueCar has a cash balance of over $1 per share, indicating financial stability.
Unit Sales Volume
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.
Negative Factors
Market Uncertainty
The company is withdrawing its outlook for accelerated growth and margin expansion due to uncertainty from newly implemented automotive sector tariffs.
Quarterly Performance
The company's 4Q24 results showed a miss on revenue and EBITDA compared to estimates, indicating underperformance in key financial metrics.
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. SPDR S&P 500 ETF (SPY)

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 primarily through fees paid by participating dealers within its network. These dealers pay TrueCar for every vehicle sold to a customer who was introduced through TrueCar's platform. Additionally, TrueCar offers subscription services to dealers for enhanced visibility and lead generation on its platform. The company may also earn revenue from advertising and data analytics services provided to automotive manufacturers and other industry stakeholders. TrueCar's strategic partnerships with organizations such as insurance companies and financial institutions further extend its reach and enhance its market presence, contributing to its revenue streams.

TrueCar Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: 29.05%|
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.

TrueCar Financial Statement Overview

Summary
TrueCar is facing financial pressure with ongoing losses and modest revenue growth. Despite a strong balance sheet with low leverage, negative cash flow trends highlight significant liquidity constraints and operational inefficiencies.
Income Statement
50
Neutral
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.
Balance Sheet
65
Positive
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.
Cash Flow
40
Negative
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue179.36M175.60M158.71M161.52M231.70M278.68M
Gross Profit152.92M149.21M142.85M145.31M209.46M257.13M
EBITDA-20.87M-18.17M-35.79M-45.46M-17.59M6.11M
Net Income-35.34M-31.05M-49.77M-118.69M-38.37M-19.84M
Balance Sheet
Total Assets145.00M159.69M204.32M251.53M387.67M458.06M
Cash, Cash Equivalents and Short-Term Investments98.03M111.83M136.96M175.52M245.22M273.31M
Total Debt10.88M11.28M14.41M23.01M31.55M36.74M
Total Liabilities33.91M41.55M44.10M54.26M57.88M74.13M
Stockholders Equity111.10M118.14M160.22M197.27M329.79M383.93M
Cash Flow
Free Cash Flow-10.22M-159.00K-34.22M-40.82M3.50M28.84M
Operating Cash Flow-2.24M7.70M-22.41M-29.14M14.19M39.12M
Investing Cash Flow-7.97M-7.86M-11.81M-8.03M-4.21M101.90M
Financing Cash Flow-25.44M-24.97M-4.33M-32.53M-38.09M-49.24M

TrueCar Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.91
Price Trends
50DMA
1.58
Positive
100DMA
1.80
Positive
200DMA
2.77
Negative
Market Momentum
MACD
0.10
Negative
RSI
63.64
Neutral
STOCH
58.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRUE, the sentiment is Positive. The current price of 1.91 is above the 20-day moving average (MA) of 1.67, above the 50-day MA of 1.58, and below the 200-day MA of 2.77, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 63.64 is Neutral, neither overbought nor oversold. The STOCH value of 58.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$1.79B27.119.18%3.90%26.71%-23.67%
75
Outperform
$886.92M23.8332.17%113.43%
72
Outperform
$3.27B14.506.55%8.75%-5.77%-15.07%
69
Neutral
$2.56B-7.25%22.90%49.04%
67
Neutral
$3.33B94.567.98%0.63%15.34%
66
Neutral
¥373.55B13.582.32%2.51%5.41%-17.67%
52
Neutral
$167.46M-26.46%10.18%1.47%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TRUE
TrueCar
1.91
-1.29
-40.31%
ATHM
AutoHome
26.28
0.46
1.78%
CARG
CarGurus
33.70
8.71
34.85%
EVER
EverQuote
24.53
2.62
11.96%
OPRA
Opera
19.98
7.09
55.00%
GENI
Genius Sports Limited
10.05
4.48
80.43%

TrueCar Corporate Events

Executive/Board ChangesShareholder Meetings
TrueCar Elects New Director at Annual Meeting
Neutral
May 23, 2025

On May 22, 2025, TrueCar held its 2025 Annual Meeting of Stockholders, where proxies representing approximately 79% of the shares entitled to vote were present. During the meeting, Faye M. Iosotaluno was elected as a Class II director, PricewaterhouseCoopers LLP was ratified as the independent public accounting firm for 2025, and the executive officer compensation was approved.

The most recent analyst rating on (TRUE) stock is a Buy with a $5.00 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.Date of analysis: Jun 28, 2025