A Glimpse of What's to Come - Report on TrueCar Inc.

Aug 04, 2015, 09:00 ET from www.aciassociation.com

NEW YORK, August 4, 2015 /PRNewswire/ --

ACI Association has initiated research coverage on TrueCar, Inc. (NASDAQ: TRUE). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.

Today, membership is open to readers on a complementary basis at the following URL: http://www.aciassociation.com/?c=TRUE

Highlights from our TRUE Report include:

  • Preliminary Second Quarter Results - On July 23, 2015, TrueCar, Inc. announced its preliminary results for the Q2 FY15 as well as adjusted its guidance for the full fiscal 2015. The Company expects Q2 FY15 revenues to be in the range of $65.0 million to $65.3 million with a net loss ranging from $15 million to $15.5 million. The Company's adjusted EBITDA (non-GAAP) for the second quarter is expected to range between a loss of $0.2 million to a gain of $0.3 million.  The financial results for the second quarter will be reported on Thursday, August 6, 2015, after the close of market.
  • Revised Full Year Guidance - TrueCar reduced its full fiscal 2015 revenue guidance to a range of $252 to $258 million. Based on the reduction in full year revenue expectations together with the investment required to drive long-term growth, the management expects adjusted EBITDA (non-GAAP) to be breakeven for the balance of 2015.
  • Channels data - According to the announcement made by TrueCar, its quarterly units came in below expectations which were a result of lower than forecasted traffic growth. The forecasted traffic growth was expected to be approximately 42% y-o-y but was lower than the guidance in each channel.
  • Factors Affecting Performance - Shortfall in unit volume were the primary reason for variance in quarterly performance from prior guidance. Defined in general terms by TrueCar, unit volume is the by-product of consumer traffic, which the Company measures in terms of monthly unique visitors, and the effectiveness of its TrueCar "experiences" (like desktop, co-branded, mobile and at the dealership) with consumers.
  • TrueCar-Branded Channel Performance - For the second quarter, this channel is expected to grow 44% YoY and 16% QoQ with a total of 81,000 units. The Company informed that in this channel, it had spent less on user acquisition than what was forecasted, as a result of which there was lower than expected traffic growth within the channel. However TrueCar added that the lower spending led to a cost per sale figure of less than $200, which met the expectations.
  • The USAA Affinity Channel Performance - Q2 expectations for the channel's performance include 59,000 units, suggesting a 15% y-o-y growth. In the USAA Affinity channel, there was a positive reception to the co-branded marketing campaign which resulted in a strong performance in traffic, Net Funnel Efficiency and units, since the launch of the program on May 21 till the end of the quarter. However, TrueCar stated that it was not enough to offset the softness observed in the first half of Q2. Taking the performance of the second half of the quarter into consideration, the channel carries strong momentum into Q3, affirmed the Company.
  • Management Comments - Scott Painter, TrueCar's CEO and Founder said that while the Company set new records for units, revenue and dealer count within the quarter, it also experienced execution challenges in meeting its growth expectations. While TrueCar's traffic growth was not as strong as anticipated, the Company believes that the six million consumers it talks to at the top of the funnel are enough for it to achieve its unit and revenue goals. He concluded by saying that the Company will be  narrowing its set of technology and development priorities to make sure that it innovates faster on its key, mobile-related feature sets that it expects to be a primary driver of improved Net Funnel Efficiency.

To find out how this influences our rating on TrueCar, Inc. read the full report in its entirely here: http://www.aciassociation.com/?c=TRUE

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