TRUE - TrueCar soars 20% after two-notch upgrade from J.P. Morgan

TrueCar ( NASDAQ: TRUE ) popped in Monday trading after J.P. Morgan moved straight to an Overweight rating from Underweight in a two-notch upgrade.

Analyst Rajat Gupta thinks the combination of recovering new vehicle inventory and supply should provide some cyclical support with valuation on TRUE not at a demanding level and liquidity risks limited.

TrueCar ( TRUE ) is noted to be simplifying the car buying process for users by combining proprietary and 3P data with robust analytics to offer a transparent and easy-to-use car-buying tool. While there is some execution risk seen with TRUE navigating multiple transitions, growing its OEM/trade businesses, and filling the gap left by the loss of the USAA partnership - TRUE is seen as cyclically better positioned in the auto retail sector and valuation covered by net cash position that is higher than the market cap.

The double upgrade on TRUE comes ahead of the retailer's earnings report due out on November 7.

Shares of TrueCar ( TRUE ) soared 20.07% in early afternoon trading on Monday to $1.83 vs. the 52-week range of $1.30 to $4.64.

The Seeking Alpha Quant Rating on TRUE is Hold with the A grade for valuation offset by low marks for profitability and momentum.

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