What's happening: When it rains, it pours, and investors of California-based TrueCar (NASDAQ:TRUE) know this all too well in 2015. TrueCar is trading another 14% lower to start the last week of July -- just the latest drop in a year-to-date downward spiral.

TRUE Chart
TRUE data by YCharts.

Why it's happening: As I noted on Friday, the driving force behind TrueCar's 35% plunge late last week was a result of a preliminary conference call during which executives explained that revenue and profits would check in lower than expected for the second quarter.

That announcement was followed by a quick downgrade by Goldman Sachs to "neutral" with a price target moved down to $8 from the previous $17 mark. But that wasn't the last of the bad news on Friday for TrueCar investors.

Later in the evening, the Law Offices of Howard G. Smith announced a class action lawsuit had been filed on behalf of TrueCar investors who purchased shares between May 16, 2014, and May 20, 2015, and have been damaged by recent declines in the company's stock price. Investors who are eligible have until July 27, 2015, to file a lead plaintiff motion.

While on one hand the lawsuit is positive for investors wanting someone to step up for them and hold TrueCar accountable for the massive decline in stock price, the news also put more downward pressure on TrueCar's stock price during Monday trading.

There is no question TrueCar has had a rough 2015, and when it rains, it pours. While revenue and profits will check in lower than expected for the second quarter, it's important for long-term investors to note that the company still expects to post year-over-year, as well as sequential, growth in units sold.

Data source: TrueCar Investor Relations.

TrueCar's business model isn't broken, but owning the company's stock isn't for the faint of heart. Risk-averse investors should watch from the sidelines. 

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.