Please ensure Javascript is enabled for purposes of website accessibility

Is TrueCar's 12% Pop on Thursday Justified?

By Daniel Miller - Feb 25, 2021 at 12:14PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

TrueCar topped fourth-quarter estimates, but what's on the road ahead?

What happened

Shares of TrueCar (TRUE 0.64%), a digital automotive marketplace connecting consumers and certified dealers, are up 12% Thursday morning after the company delivered better than expected fourth-quarter financial results.

So what

TrueCar reported a 25% decline in revenue during the fourth quarter, down to $64 million. That result was strong enough to top analysts' estimates of $59 million. The company's fourth-quarter adjusted net loss checked in at $1.1 million, or a loss of $0.01 per share, which was still above analysts' estimates calling for a loss of $0.05 per share.

TrueCar had a 2% increase in average monthly unique visitors during the fourth quarter, and monetization -- which is the average transaction revenue per unit -- jumped to $382 during the fourth quarter, compared to $342 in the prior year. 

Man with an automobile graphic on a smart tablet.

Image source: Getty Images.

Now what

The fourth-quarter earnings beat and momentum heading into 2021 warrants today's short-term stock price pop, but the company has plenty of work to do on its long-term journey. TrueCar is still struggling with lower unit volume, but it has gained momentum thanks to its new partnership with Navy Federal and its launch of the "Deal Builder" experience. Management is aiming for first-quarter revenue in the range of $60 million to $62 million, and for that to increase sequentially through 2021.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

TrueCar, Inc. Stock Quote
TrueCar, Inc.
$3.13 (0.64%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.