The company (TRUE, Financial) has opted not to issue financial projections for the upcoming quarter and beyond, citing uncertainty in market dynamics. Although April exhibited robust year-over-year revenue growth fueled by strong consumer demand and incentives from original equipment manufacturers (OEMs), the company remains cautious. This hesitance arises from the need to clear pre-tariff inventory and gain clearer insights into vehicle supply and pricing trends, which are crucial for determining future revenue from dealers and OEM incentives.
Despite the challenges in forecasting near-term performance, TRUE is confident in the value it provides to partners and the adaptability of its cost structure. The company believes these strengths will help buffer any potential slowdowns in growth, enabling it to effectively manage cash flow, regardless of market conditions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for TrueCar Inc (TRUE, Financial) is $4.00 with a high estimate of $5.00 and a low estimate of $3.25. The average target implies an upside of 170.27% from the current price of $1.48. More detailed estimate data can be found on the TrueCar Inc (TRUE) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, TrueCar Inc's (TRUE, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for TrueCar Inc (TRUE, Financial) in one year is $3.75, suggesting a upside of 153.38% from the current price of $1.48. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the TrueCar Inc (TRUE) Summary page.
TRUE Key Business Developments
Release Date: February 19, 2025
- Annual Revenue: $175.6 million, a 10.6% increase year over year.
- Adjusted EBITDA: $1.6 million, an increase of $15.3 million year over year.
- Cash Flow from Operations: $7.7 million, a year over year improvement of $30.1 million.
- Free Cash Flow: Negative $0.2 million, a year over year improvement of $34.1 million.
- Total Unit Sales: 356,000 units, an 11.7% increase year over year.
- New Vehicle Unit Sales: 204,000 units, a 15.6% increase year over year.
- Franchise Dealer Count: Increased by 119 dealers to 8,351, a 1.4% increase year over year.
- Q4 Revenue: $46.2 million, an 11.9% increase year over year.
- Q4 Adjusted EBITDA: $0.4 million.
- Q4 Cash Flow from Operations: $5.9 million.
- Q4 Free Cash Flow: $4.1 million, an increase of $12.2 million year over year.
- Q4 Total Units: 93,000 units, a 22% increase year over year.
- Q4 New Units: 58,000 units, a 27.8% increase year over year.
- Share Repurchase: 6.1 million shares of TrueCar stock repurchased.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- TrueCar Inc (TRUE, Financial) reported a 10.6% year-over-year revenue growth, reaching $175.6 million, marking the strongest annual revenue growth since 2017.
- Adjusted EBITDA improved significantly, growing by $15.3 million year-over-year to $1.6 million.
- The company achieved a year-over-year improvement in cash flow from operations by $30.1 million, reaching $7.7 million.
- TrueCar Inc (TRUE) successfully launched TC Plus, becoming the first digital marketplace to enable the purchase and sale of new, used, and certified pre-owned vehicles entirely online.
- The company repurchased 6.1 million shares of its stock, indicating confidence in its future prospects and returning value to shareholders.
Negative Points
- TrueCar Inc (TRUE) expects a modest Q1 revenue growth in the high single digits, with a negative adjusted EBITDA of approximately $5 million due to increased headcount and marketing investments.
- The company faces challenges with dealer churn, particularly among smaller independent dealers, due to high-interest rates and inventory financing difficulties.
- The loss of the American Express partnership is expected to impact Q1 revenue, creating a gap that needs to be bridged with new partnerships.
- TrueCar Inc (TRUE) is experiencing a transitional phase with its OEM incentive revenue, which has not yet fully recovered to pre-pandemic levels.
- The integration of DMS with TC Plus is still in progress, requiring further development to fully automate the buying process and reduce manual tasks for dealers.
