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What's in Store for TrueCar (TRUE) This Earnings Season?
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TrueCar, Inc. (TRUE - Free Report) is slated to report second-quarter 2016 results on Aug 4. Last quarter, the company posted a positive earnings surprise of 12.50%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
TrueCar reported encouraging first-quarter 2016 results with revenues increasing 6% from the year-ago quarter.
The company reported a 29% increase in new car franchises with the franchise dealer count (number of new car brands sold by Truecar Certified Dealers) increasing during the quarter.
TrueCar witnessed 21% growth in average monthly unique visitors on a year-over-year basis. The number of units grew 4%. Monetization in the quarter also increased marginally from the year-ago quarter.
TrueCar’s main focus now is to bring in refinements in its marketplace so as to meet the demands of car buyers, dealers and original equipment manufacturers (OEMs).
TrueCar’s business model stands on four pillars namely new car transparency model, value proposition and cost per action model, good relationships with affinity partners and a positive image of the brand.
The company introduced the Dealer Pledge during the first quarter of 2016 to address the requirements of dealers in a better way.
For the second quarter, TrueCar expects revenues of between $64 million and $66 million and adjusted EBITDA in the range of ($2 million) to ($3 million). Additionally, it expects units to remain in the range of 185,000 to 190,000.
Earnings Whispers
Our proven model does not conclusively show that TrueCar is likely to beat estimates this quarter as it does not have the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 19 cents per share. Hence, the difference is 0.00%.
Zacks Rank: TrueCar currently has a Zacks Rank #3 which when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some stocks that you may want to consider as our model shows these have the right combination of elements to post a positive earnings surprise:
CDK Global, Inc. , with an Earnings ESP of +4.26% and a Zacks Rank #1.
Analog Devices, Inc. (ADI - Free Report) with an Earnings ESP of +2.63% and a Zacks Rank #2.
CenturyLink, Inc. , with an Earnings ESP of +5.09% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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What's in Store for TrueCar (TRUE) This Earnings Season?
TrueCar, Inc. (TRUE - Free Report) is slated to report second-quarter 2016 results on Aug 4. Last quarter, the company posted a positive earnings surprise of 12.50%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
TrueCar reported encouraging first-quarter 2016 results with revenues increasing 6% from the year-ago quarter.
The company reported a 29% increase in new car franchises with the franchise dealer count (number of new car brands sold by Truecar Certified Dealers) increasing during the quarter.
TrueCar witnessed 21% growth in average monthly unique visitors on a year-over-year basis. The number of units grew 4%. Monetization in the quarter also increased marginally from the year-ago quarter.
TrueCar’s main focus now is to bring in refinements in its marketplace so as to meet the demands of car buyers, dealers and original equipment manufacturers (OEMs).
TrueCar’s business model stands on four pillars namely new car transparency model, value proposition and cost per action model, good relationships with affinity partners and a positive image of the brand.
The company introduced the Dealer Pledge during the first quarter of 2016 to address the requirements of dealers in a better way.
For the second quarter, TrueCar expects revenues of between $64 million and $66 million and adjusted EBITDA in the range of ($2 million) to ($3 million). Additionally, it expects units to remain in the range of 185,000 to 190,000.
Earnings Whispers
Our proven model does not conclusively show that TrueCar is likely to beat estimates this quarter as it does not have the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 19 cents per share. Hence, the difference is 0.00%.
Zacks Rank: TrueCar currently has a Zacks Rank #3 which when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
TRUECAR INC Price and EPS Surprise
TRUECAR INC Price and EPS Surprise | TRUECAR INC Quote
Stocks That Warrant a Look
Here are some stocks that you may want to consider as our model shows these have the right combination of elements to post a positive earnings surprise:
CDK Global, Inc. , with an Earnings ESP of +4.26% and a Zacks Rank #1.
Analog Devices, Inc. (ADI - Free Report) with an Earnings ESP of +2.63% and a Zacks Rank #2.
CenturyLink, Inc. , with an Earnings ESP of +5.09% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>