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Bear of the Day: TrueCar, Inc. (TRUE)

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TrueCar, Inc. (TRUE - Free Report) is a top automotive digital marketplace that’s suffered amid vehicle inventory shortages and the broader economic environment driving up car prices over the last year.

TRUE Story

TrueCar is a leading automotive digital marketplace that lets car buyers connect to its nationwide network of Certified Dealers. Users can then browse and search for both new and used cars with the goal of “making car buying and selling easy, transparent, and efficient.”

TrueCar’s website and digital platforms are user-friendly and offer wide-ranging or very precise search parameters. The company also boasts that it “powers auto-buying programs for more than 250 leading brands, including Sam's Club, Navy Federal Credit Union and American Express.”

The stock has struggled to find its footing for years and the last 12 months have been no different. TrueCar’s revenue fell by 17% in 2020, only to slip by nearly the exact same percentage in 2021. TRUE’s fourth quarter revenue dropped 28%.

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Image Source: Zacks Investment Research

TrueCar’s management team cited “limited new vehicle inventories across dealers, a consequence of the macro environment, including the continuing automobile semiconductor chip shortage,” as a reason for the rough showing. The company also provided a rather downbeat outlook when it released its fourth quarter results in late February.

Bottom Line

Zacks estimates call for TrueCar’s revenue to fall another 15% in 2022 to help expand its adjusted loss from -$0.22 a share in 2021 to -$0.33 per share this year. TRUE’s downward earnings revisions activity helps it land a Zacks Rank #5 (Strong Sell) right now.

The nearby chart also showcases how rough a time TrueCar shares have had over the last five years. TRUE stock fell another 4.6% on Wednesday. And its Internet – Services industry currently ranks in the bottom 20% of over 250 Zacks industries.

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