Financial Analysis: TrueCar (TRUE) and Its Peers
TrueCar (NASDAQ: TRUE) is one of 50 public companies in the “Internet Services” industry, but how does it contrast to its peers? We will compare TrueCar to similar companies based on the strength of its earnings, profitability, analyst recommendations, risk, dividends, valuation and institutional ownership.
Insider and Institutional Ownership
91.7% of TrueCar shares are held by institutional investors. Comparatively, 73.5% of shares of all “Internet Services” companies are held by institutional investors. 15.5% of TrueCar shares are held by company insiders. Comparatively, 20.3% of shares of all “Internet Services” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares TrueCar and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
TrueCar has a beta of 3, meaning that its share price is 200% more volatile than the S&P 500. Comparatively, TrueCar’s peers have a beta of 1.36, meaning that their average share price is 36% more volatile than the S&P 500.
This is a breakdown of recent ratings and recommmendations for TrueCar and its peers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
TrueCar currently has a consensus target price of $18.50, suggesting a potential upside of 10.65%. As a group, “Internet Services” companies have a potential upside of 6.54%. Given TrueCar’s stronger consensus rating and higher possible upside, equities analysts plainly believe TrueCar is more favorable than its peers.
Earnings & Valuation
This table compares TrueCar and its peers revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|TrueCar||$306.80 million||-$16.51 million||-47.77|
|TrueCar Competitors||$950.86 million||$126.85 million||54.35|
TrueCar’s peers have higher revenue and earnings than TrueCar. TrueCar is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
TrueCar peers beat TrueCar on 7 of the 12 factors compared.
TrueCar, Inc. is an Internet-based information, technology, and communication services company. The Company has a data-driven online platform, which features market data and analytics. The Company-branded platform is available on its TrueCar Website and mobile applications. It customizes and operates its platform on a co-branded basis for its affinity group marketing partners, including financial institutions, membership-based organizations, and employee buying programs for a range of enterprises. The Company enables users to obtain market-based pricing data on new and used cars, and to connect with its network of TrueCar Certified Dealers. Its network of over 13,000 TrueCar Certified Dealers consists primarily of new car franchises, as well as independent dealers selling used vehicles. Its subsidiary, ALG, Inc., provides forecasts and consulting services regarding determination of the residual value of an automobile at given future points in time.
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