What happened
Shares of online car-buying service TrueCar (TRUE 2.13%) surged on Friday morning. As of 11:45 a.m. EDT, TrueCar's stock was trading up over 18% from Thursday's close.
So what
TrueCar reported its third-quarter earnings after the market closed on Thursday, and investors liked what they saw. The company's adjusted loss of $0.01 per share was well ahead of the average $0.06-per-share loss expected by Wall Street analysts.
Image source: TrueCar.
Looking a little deeper, there were several signs that CEO Chip Perry, who joined the company after a management upheaval late last year, has TrueCar's business headed in a good direction.
- Revenue grew 4% to $75.1 million, a record.
- TrueCar users bought 220,633 vehicles via the service in the third quarter, up 6.1%.
- TrueCar now has 10,759 new-car "franchise dealer" partners, up 24%.
- Acquisition cost per sale was an average $180 in the quarter, down 8% from a year ago.
- There were 7.6 million average monthly unique visitors to TrueCar's site, up 15% from a year ago.
- Adjusted EBITDA rose to $5.8 million, more than double its year-ago result, with a 7.7% margin.
Now what
TrueCar guided to a strong finish to 2016. It expects fourth-quarter revenue, vehicles bought via the service, and adjusted EBITA all to come in well ahead of year-ago results.
