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Goldman Sachs: Buy TrueCar Now

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In a report published Monday, Goldman Sachs analysts upgraded the rating on TrueCar Inc (NASDAQ: TRUE) from Neutral to Buy, with a price target of $22.

TrueCar's share price has declined by 32 percent year-to-date, boosted by increased seasonality of the business, decelerating SAAR and a lock-up expiration. The analysts believe that this decline has created an opportunity "ahead of the favorable summer months and new product launches."

The company's marketing and product initiatives are expected to help it garner a significant share of the new car sales. "TrueCar has consistently gained 100bps+ share per year which we expect to accelerate as dealer coverage reaches a critical mass, product initiatives particularly in mobile drive user adoption, and marketing builds brand awareness," the report mentioned.

TrueCar is heading towards seasonally favorable quarters. "2Q/3Q represents the strongest periods for new cars sold in the US and TrueCar is increasingly matching its advertising to that schedule. This suggests that while 1Q may exhibit more negative seasonality than prior years, upcoming quarters should be more positive," the analysts added.

"With TrueCar's traffic growing 5x faster than the category average and the company ramping advertising spend in March ahead of the summer selling season, we believe TrueCar's share gains could accelerate," the report stated.

Apart from the company's core dealer product, newer offerings like OEM incentives and TrueTrade could boost its performance in H2 and 2016.

Latest Ratings for TRUE

DateFirmActionFromTo
Jul 2017Morgan StanleyMaintainsUnderweight
Mar 2017CitigroupInitiates Coverage OnBuy
Feb 2017RBC CapitalUpgradesSector PerformOutperform

View More Analyst Ratings for TRUE
View the Latest Analyst Ratings

Posted-In: Goldman SachsAnalyst Color Upgrades Analyst Ratings

 

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