Shares of Santa Monica’s TrueCar Inc. lost a third of their value in after-hours trading Thursday after the company reported that it would miss financial targets for the second quarter and full year.
The online car-pricing site’s stock closed at $10.68 Thursday, but following the announcement this afternoon, shares have tumbled by 33 percent to $7.15.
The company reported in a Securities and Exchange Commission filing that second-quarter revenue is expected to be between $65 million and $65.3 million, with an expected net loss of between $15 million and $15.5 million. Wall Street analysts were expecting second-quarter sales of $68.5 million.
TrueCar also reduced its revenue guidance for the full year to a range of $252 million to $258 million. Analysts had been predicting sales of $283 million for the year.
The reason for the shortfall is simple: fewer cars were sold on the platform due to lower-than-forecasted traffic growth.
“While we set new records for units, revenue and dealer count within the quarter, we experienced execution challenges in meeting our growth expectations,” said TrueCar founder and Chief Executive Scott Painter, according to a MarketWatch report.
TrueCar is also dealing with lawsuits in California and New York questioning its right to operate without a dealer license, as well as the recent decision by AutoNation to pull its 279 dealerships from the platform.