Analyst Advises Buying Into TrueCar Inc. Weakness

TrueCar Inc.'s

revenue will increase 38 percent this year as it continues to gain market share, an analyst said Thursday. TrueCar, down more than 18 percent since posting a sequential dip in quarterly earnings last month, changed hands recently at $17.29, up $0.19 cents. JMP's Ronald F. Josey reiterated a Buy rating and $24 on the company, which provides online information on current car prices and steers buyers to affiliated dealers. Josey acknowledged risk around a March 12 lock-up expiration related to the company's initial public offering last May. "But we would be taking advantage of the current pull-back," Josey said. TrueCar will sell 825,000 vehicles in 2015, or about 4.6 percent of all new cars sold in the U.S., Josey estimated. Newly launched consumer incentives from TrueCar may add to average revenue per unit garnered by the company, and aren't included in its guidance, according to Josey. TrueCar is investing heavily in mobile apps, where it expects to derive 90 percent of its business during the next 18 months. Among analysts following TrueCar, four rate the shares Buy and two maintain Hold ratings.