TrueCar's Outlook Is Cloudy, Analyst Downgrades Stock Seeking More Visibility

Core Viewpoint - JP Morgan analyst Rajat Gupta downgraded TrueCar, Inc. from Overweight to Neutral due to disappointing fourth-quarter results and uncertain recovery prospects [1][2]. Financial Performance - TrueCar reported a fourth-quarter EPS loss of 7 cents per share, which was worse than the analyst consensus estimate of a loss of 6 cents [1]. - Revenue for the quarter was $46.21 million, missing the consensus estimate of $47.29 million [1]. Growth and Profitability Outlook - The analyst highlighted a weakening boost from rising new vehicle inventories and limited visibility on a sustained turnaround in revenue and profits [1][2]. - Upcoming products and initiatives, such as TCMS, OEM advertising, and data monetization, present potential but require clear results to validate investments in sales and marketing [2]. Revised Financial Estimates - The FY25 EBITDA estimate was revised from a previous projection of over $15 million to breakeven due to weaker dealer revenue [3]. - The FY26 EBITDA estimate was lowered from $35 million to $25 million [3]. Market Reaction - Following the downgrade and revised estimates, TrueCar shares fell by 5.21%, trading at $2.531 [3].