Why Analysts Are Frowning on TrueCar After Earnings

TrueCar Inc. (NASDAQ: TRUE) released its fourth-quarter earnings report on Friday. Unfortunately this report pushed the company nearly to 52-week lows. Needless to say analysts did not take kindly to this report.

The company had a net loss of $0.06 per share and $63.6 million in revenue, which compared to consensus estimates that called for a net loss of $0.04 per shares on revenue of $64.8 million. In the same period of the previous year, the company reported no earnings and $55.5 million in revenue.

Over the course of 2015, a record 750,108 cars and light trucks were sold to TrueCar users by TrueCar Certified Dealers, up 23% from last year. The TrueCar Certified Dealer network included over 11,000 dealers at the end of the year, including 9,094 franchise dealers.

Average monthly unique visitors totaled 5.9 million in the fourth quarter, an increase from 4.4 million in the same period from last year.

In terms of guidance, the company expects first-quarter revenue to be in the range of $60 million to $62 million and for adjusted EBITDA to break even. The consensus estimates are $0.01 in per-share earnings on $69.18 million in revenue.

A few analysts weighed in on TrueCar after the earnings report:

  • B. Riley lowered its price target to $3.50 from $4.00.
  • Cowen has a Market Perform rating and lowered its price target to $4 from $7.
  • JMP Securities downgraded it to Market Perform from Market Outperform.
  • JPMorgan has a Neutral rating and lowered its price target price to $6 from $10.
  • RBC has a Sector Perform rating and lowered its price target from $10 to $6.

Shares of TrueCar ended last week at $5.04, with a consensus analyst price target of $8.28 and a 52-week trading range of $4.01 to $20.24.