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TrueCar, Inc.
$2.54
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 79.6% below fair value
You pay
$2.54
Bear
$10.42
Fair
$12.45
Bull
$14.47
Bear
$10.42
+310.3%
$0.72 × 18x P/E
Fair
$12.45
+390.1%
$0.72 × 22x P/E
Bull
$14.47
+469.8%
$0.72 × 25x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
3.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $3.35 from 23 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $12.45 per share.
Warnings
Wall Street's average price target is $3.35 (from 23 analysts). Our estimate is 362% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples