- I believe that TRUE's structural unprofitability is here to stay. Moreover, its mediocre business will continue to weigh on the shares.
- Furthermore, I deem the company's stock-based compensation expenses excessive. This has allowed executives to profit while TRUE booked massive losses.
- My valuation model uses the company's FCF and excludes SBC. Despite these generous inputs, TRUE looks substantially overvalued.
- My fair value estimate per share for TRUE is $2.14, which implies a whopping 55.9% potential downside. This would bring the stock back to April 2020 levels.
- Ultimately, I suggest you pass up on TRUE altogether.
For further details see:
Save Yourself Headaches And Avoid TrueCar Altogether