TrueCar, Inc. (NASDAQ: TRUE)

Sector: Communication Services Industry: Internet Content & Information CIK: 0001327318
Market Cap 225.15 Mn
P/B 1.97
P/E -12.10
P/S 1.24
ROIC (Qtr) -28.43
Div Yield % 0.00
Rev 1y % (Qtr) -7.17
Total Debt (Qtr) 9.88 Mn
Debt/Equity (Qtr) 0.09

About

TrueCar, Inc., a prominent player in the automotive industry, operates under the NASDAQ stock symbol "TRUE." As a digital marketplace, TrueCar facilitates connections between car buyers and its network of certified dealers. The company's mission revolves around constructing a highly personalized and efficient car buying experience, bolstered by a diverse software ecosystem, proprietary data, and analytics. TrueCar's platform is accessible through its website and mobile applications, as well as on a co-branded basis for over 250 leading brands and...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 7.86M provides robust 0.79x coverage of total debt 9.88M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 103.19M provide 27.97x coverage of short-term debt 3.69M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 148.69M provides 15.04x coverage of total debt 9.88M, indicating robust asset backing and low credit risk.
  • Tangible assets of 148.69M provide robust 9.78x coverage of other current liabilities 15.20M, indicating strong asset backing.
  • Cash reserves of 103.19M provide solid 296.51x coverage of other non-current liabilities 348000, indicating strong liquidity.

Bear case

  • Operating cash flow of 7.86M barely covers its investment activities of (7.87M), with a coverage ratio of -1, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (7.87M) provide weak support for R&D spending of 29.09M, which is -0.27x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 7.86M shows concerning coverage of stock compensation expenses of 12.75M, with a 0.62 ratio indicating potential earnings quality issues.
  • Operating earnings of (18.60M) show weak coverage of depreciation charges of 15.60M, with a -1.19 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (19000) provides weak coverage of capital expenditures of 7.87M, with a -0 ratio suggesting additional external financing needs for growth initiatives.

Peer comparison

Companies in the Internet Content & Information
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GOOGL Alphabet Inc. 4,538.16 Bn 131.46 27.23 33.71 Bn
2 META Meta Platforms, Inc. 1,747.49 Bn 74.30 23.25 51.06 Bn
3 SPOT Spotify Technology S.A. 103.00 Bn 62.32 5.18 2.57 Bn
4 BIDU Baidu, Inc. 62.73 Bn 49.63 3.42 13.66 Bn
5 RDDT Reddit, Inc. 32.18 Bn 92.16 16.90 0.03 Bn
6 NBIS Nebius Group N.V. 27.81 Bn 127.53 81.80 4.51 Bn
7 TME Tencent Music Entertainment Group 24.66 Bn 15.77 5.54 0.54 Bn
8 PINS Pinterest, Inc. 16.95 Bn 8.53 4.18 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.96 1.10
EV to Cash from Ops. EV/CFO 18.21 -3.08
EV to Debt EV to Debt 14.47 28.98
EV to EBIT EV/EBIT -7.69 -26.54
EV to EBITDA EV/EBITDA -7.67 9.30
EV to Free Cash Flow [EV/FCF] EV/FCF -7,527.83 -67.01
EV to Market Cap EV to Market Cap 0.64 0.90
EV to Revenue EV/Rev 0.79 61.25
Price to Book Value [P/B] P/B 1.97 1.56
Price to Earnings [P/E] P/E -12.10 2.92
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.33
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -8.92
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.58
Interest Coverage Int. cover (Qtr) 0.00 -202.56
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 7.27 -24.06
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -9.89 175.36
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.94
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 31.31 31.53
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -31.66 -472.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 31.32 32.66
EBT Growth (1y) % EBT 1y % (Qtr) 31.32 -25.80
EPS Growth (1y) % EPS 1y % (Qtr) 25.00 -18.36
FCF Growth (1y) % FCF 1y % (Qtr) 99.85 20.83
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -3.67 19.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.22 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 3.69 1.54
Current Ratio Curr Ratio (Qtr) 4.49 3.38
Debt to Equity Ratio Debt/Equity (Qtr) 0.09 -0.39
Interest Cover Ratio Int Coverage (Qtr) 0.00 -202.56
Times Interest Earned Times Interest Earned (Qtr) 0.00 -202.56
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -1.70 -4,283.87
EBIT Margin % EBIT Margin % (Qtr) -10.26 -4,786.62
EBT Margin % EBT Margin % (Qtr) -10.26 -5,002.12
Gross Margin % Gross Margin % (Qtr) 79.20 58.65
Net Profit Margin % Net Margin % (Qtr) -10.30 -5,003.08