TrueCar, Inc. (NASDAQ: TRUE)
On Thursday February 18th 2016, TrueCar reported their 4th quarter fiscal earnings after the close of regular trading on the Nasdaq Stock Market. Shares immediately sold off- closing down 16.46% at $4.82 after having closed the regular session at $5.77 which was down 2.2%. Earnings figures that the company released obviously we’re not good, and investors fled in droves. If you have been in the market for a new car in the last few years, you most likely have heard of true car or used their services. They provide an online smorgasbord for potential car buyers to analyze prices, compare options, change features and get pricing and ascertain an overall true Dealer cost of the vehicle they are looking to purchase(or lease). While revenues rose to $63.6 million from $55 million, that was not enough, as the company lost .33 cents per share and lost $0.06 per share on on an adjusted basis. Analysts had been expecting a loss of only $0.04 per share and revenues much higher at 65 million dollars.
In the aftermath that ensued from the earnings release, Company Leaders had some things to say to assuage investors’ fears and concerns:
“I took this job because I believe TrueCar can become the clear category winner in the online automotive space over the next few years,” said Perry, President and Chief Executive Officer. “We will do this by refining how our marketplace works so that it can provide the best overall value proposition for car buyers, dealers and automakers.”
“Fourth-quarter revenue rose 15 percent from a year ago and the number of vehicles sold to TrueCar users by TrueCar Certified Dealers increased 12 percent compared with the fourth quarter of 2014, yet the period was a difficult one and marked the close of a challenging year,” said Mike Guthrie, TrueCar’s Chief Financial Officer.- GlobeNewswire
In the accompanying chart, which spans back to the same time in 2015, you will note the 45 degree down-trend line which was resistance in red. Also see an arrow in red showing the downward direction which price could not break through on a few attempts at rallying. You will then notice a green horizontal line support trendline which has served as support on two or three occasions in the past six months. Clearly after today’s earnings announcement however the shares will be breaking through that green support line and find themselves in that red circled area with arrows well below support. Friday’s trading session for TrueCar will be one that will be closely watched by long-term investors and short-term traders alike.
TrueCar, Inc. operates as an Internet-based information, technology, and communication services company. The company operates its platform on the TrueCar Website and TrueCar mobile applications. It also customizes and operates its platform for its affinity group marketing partners, including financial institutions, membership-based organizations, and employee buying programs for large enterprises. The companys platform enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar certified dealers. In addition, it provides data and consulting services regarding determination of the residual value of an automobile at future given points in time, which are used to underwrite automotive loans and leases, and by financial institutions to measure exposure and risk across loan, lease, and fleet portfolios. Further, it provides geographically specific and real-time pricing information for consumers and dealers. The company was formerly known as Zag.com Inc. TrueCar, Inc. was founded in 2005 and is based in Santa Monica, California.– YahooFinance