Shares of online car-buying service TrueCar (NASDAQ:TRUE) were up sharply on Friday morning, after the company reported better-than-expected earnings and raised its guidance for the full year.
As of 11 a.m. EST, TrueCar's shares were up about 34% from Thursday's closing price.
At first glance, TrueCar's third-quarter earnings report doesn't look great. The company lost $7.7 million in the quarter, versus a $6.3 million loss in the third quarter of last year. But its revenue and its adjusted earnings before interest, tax, depreciation, and amortization (adjusted EBITDA) exceeded the high ends of the respective guidance ranges TrueCar had provided in August, suggesting that interim CEO Mike Darrow's efforts to turn the company around are starting to take hold.
That said, there's still work to be done. TrueCar's key business metrics -- website visitors, total vehicles purchased via the service, and average fee per purchase -- were down slightly from a year ago. A revamped site and a "rebranding" campaign are due soon.
TrueCar also raised its full-year guidance for both revenue and adjusted EBITDA. The context here is that the company gave a pessimistic outlook and cut both guidance ranges sharply in August, a move that led to a widespread sell-off of its shares.
The revised guidance, which predicts that adjusted EBITDA will fall by about half from 2018, isn't exactly rosy. But as with the quarterly results, it's enough to give investors some confidence that better days are ahead.