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What: Shares of TrueCar (NASDAQ:TRUE) collapsed during the month of July, declining by 45.6%, according to S&P Capital IQ data. The bulk of this decline came after the company issued a warning, lowering its guidance for both the second quarter and the full year.

So what: TrueCar announced its preliminary results for the second quarter on July 23. Revenue was expected to come in between $65 million and $65.3 million, with a net loss between $15 million and $15.5 million. The consensus estimate for revenue was $68.3 million.

TrueCar also lowered its guidance for the full year. Revenue is now expected to be between $252 million and $258 million, and adjusted EBITDA is forecast to be at breakeven during the remainder of 2015. Analysts expected $283.1 million in revenue.

The company blamed a shortfall in unit volume on the disappointing results and guidance, with traffic growing at a slower rate than expected. CEO Scott Painter explained: "While we set new records for units, revenue and dealer count within the quarter, we experienced execution challenges in meeting our growth expectations. Although our traffic growth was not as strong as anticipated, the six million consumers we talk to at the top of the funnel are enough for us to achieve our unit and revenue goals. In order to achieve those goals, we are refocusing on the core experience all the way from the initial engagement of the consumer on the front end of the experience through to post-sale engagement for feedback."

Now what: Earlier this year, an analyst from B. Riley downgraded the stock, citing concerns that TrueCar was close to reaching peak dealer penetration, which would lead to a slowdown in its business. It appears that these concerns regarding growth have played out; the stock has fallen off a cliff since then, and growth is now expected to be far slower than previously anticipated.

TrueCar is still unprofitable, reporting a net loss of $14.7 million during the fourth quarter on $65.3 million of revenue, and with the CEO having announced in August that he will be stepping down, it's clear that the company is facing some serious headwinds. The growth story, which propelled shares of TrueCar to $25 per share at the end of last year, got a major readjustment during July, and with shares down nearly 80% from the 52-week high, investors appear to have lost confidence in the company.

Timothy Green has no position in any stocks mentioned. The Motley Fool recommends TrueCar. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.