Shares of online car-shopping service TrueCar (TRUE 0.96%) opened sharply lower on Friday after the company reported second-quarter results that fell short of its previous guidance and cut estimates for the full year.
As of 10:30 a.m. EDT, TrueCar's stock was trading at $3.15, down almost 35% from Thursday's closing price.
TrueCar reported its second-quarter earnings after the bell on Thursday, and they weren't good. On an adjusted basis, excluding employee stock-option expenses, TrueCar lost $0.02 per share on revenue of $88.1 million after some of its automaker partners cut back spending on incentives.
Wall Street analysts polled by Thomson Reuters had expected break-even earnings ($0.00 per share) on revenue of $89.21 million, on average. TrueCar missed on both counts, and with the miss coming after the surprise retirement of its CEO in June, investors are heading for the exits.
TrueCar's results didn't just miss Wall Street's estimates, they missed its own. Results fell short of the guidance given in May, when the company cut its previous full-year guidance for 2019.
In light of that result, it cut its full-year guidance again: It now expects its 2019 revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to fall below its 2018 results. At least for the near term, the company's revenue-growth story is over.
TrueCar wasn't around during the last recession. How it will fare when auto sales slide during an economic downturn has always been an open question. It's looking as if many investors aren't interested in sticking around to find out the answer.