What happened

Online car-buying facilitator TrueCar (NASDAQ:TRUE) is having a tough day on Wall Street after reporting its second-quarter earnings and revising its 2017 forecast late on Tuesday. As of 12:41 p.m. EDT on Wednesday, TrueCar's shares were trading at $16.95, down 13.1% from Tuesday's closing price.

So what

TrueCar's Q2 numbers, for the most part, were quite good. Adjusted for employee stock-option costs and one-time items, it earned $0.01 per share on revenue of $81.8 million -- slightly ahead of analysts' consensus estimate.

A glass door with the TrueCar logo at the entrance to its corporate offices.

Image source: TrueCar

If earnings were good, why is TrueCar's stock down so much today? It appears to be all about the guidance: TrueCar said that it expects third quarter revenue of between $85 million and $87 million. While that would represent a good gain over the $75.1 million it generated in the Q3 2016, it's a little short of the average $87.68 million estimate among Wall Street analysts surveyed by Thomson Reuters

That was probably enough to kick off a wave of selling when the market opened. 

Now what? 

TrueCar has done well since CEO Chip Perry took the helm late in 2015, narrowing losses, expanding its network of partner dealerships, and building out its online offering. Notwithstanding today's volatility, if TrueCar's fundamentals continue to improve, its share price should continue to trend upward over time.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.