TrueCar, Inc. (NASDAQ:TRUE): When Will It Breakeven?
We feel now is a pretty good time to analyse TrueCar, Inc.'s (NASDAQ:TRUE) business as it appears the company may be on the cusp of a considerable accomplishment. TrueCar, Inc. operates as an internet-based information, technology, and communication services company in the United States. The US$333m market-cap company announced a latest loss of US$50m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on TrueCar's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for TrueCar
TrueCar is bordering on breakeven, according to the 5 American Interactive Media and Services analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$1.7m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 73%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of TrueCar's upcoming projects, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. TrueCar currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on TrueCar, so if you are interested in understanding the company at a deeper level, take a look at TrueCar's company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:
Valuation: What is TrueCar worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether TrueCar is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on TrueCar’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
