TrueCar, Inc.TRUE is slated to report second-quarter 2018 results on Aug 9. In the last reported quarter, the company delivered a negative earnings surprise of 50%.
Notably, the company surpassed estimates in one of the trailing four quarters, with an average positive surprise of 87.5%.
We observe that the stock has lost 41.4% against its industry 's growth of 2.2% in the past year.
Factors to Consider
In the first quarter, TrueCar generated revenues of $81.1 million, up 7% year over year.
The company continues to benefit from its strong focus toward the improvement of USAA channel, pricing and monetization, as well as OEM business.
Further, TrueCar's continued efforts to improvise the franchise dealer business with the help of effective price alignment will boost its franchise dealer base.
Also, the company's existing OEM incentive programs are running well and are likely to aid TrueCar's revenues in the to-be-reported quarter.
Moreover, TrueCar trade-in tool's strong performance is evident from its growing demand among both consumers and dealers. The trend is likely to have continued in the quarter as well.
TrueCar's core auto buying offering, inventory and pricing solution have been gaining strength. The company is currently working on a number of initiatives that are helping it to grow traffic, raise conversion rates and improve close rates. It is steering upstream into the research and discovery phase of the car-buying process, and downstream into the transaction phase. Driven by these, market share and revenue gains are anticipated in the to-be-reported quarter.
The company made significant progress with its dealer pledge (reforming product, advertising and business practices), which helped it to attract high quality franchise dealers to its platform. The company is expected to grow, owing to greater number of dealers in the to-be-reported quarter. Other focus areas include enhancement of trade-ins, digital retailing and affinity partnership.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 has a good chance of beating estimates if it also has a positive Earnings ESP.
The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.
TrueCar, Inc. Price and EPS Surprise
Stocks to Consider
We see a likely earnings beat for each of the following companies:
Vishay Intertechnology, Inc. VSH has an Earnings ESP of +2.41% and sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .
Infinera Corporation INFN has an Earnings ESP of +3.57% and a Zacks Rank of 2.
Avnet, Inc. AVT has an Earnings ESP of +1.37% and a Zacks Rank #2.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.