DealerTrack Holdings Earnings: Here’s Why Investors are Not Happy Now

DealerTrack Holdings, Inc. (NASDAQ:TRAK) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 1.14%.

DealerTrack Holdings, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 19.35% to $0.37 in the quarter versus EPS of $0.31 in the year-earlier quarter.

Revenue: Rose 26.35% to $121.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: DealerTrack Holdings, Inc. reported adjusted EPS income of $0.37 per share. By that measure, the company beat the mean analyst estimate of $0.32. It beat the average revenue estimate of $114.67 million.

Quoting Management: Mark F. O’Neil, chairman and chief executive officer of Dealertrack Technologies, Inc., commented, “Our momentum continued into the second quarter with revenue of nearly $122 million, up 26 percent in total from a year ago and up 17 percent on an organic basis. Customers are increasingly embracing our vision of transforming automotive retail through integrated technology solutions. During the second quarter, we saw accelerating organic subscription revenue growth. We also saw strong trends in transaction revenue independent of healthy car sales and credit trends, as we increased average transaction price per car sold through growing adoption and cross selling of registration, titling and lien services. We are optimistic that these positive trends will continue through the end of the year, as reflected in the increase of our full year guidance, and believe they position us for sustainable growth in the years ahead.”

Key Stats (on next page)…

Revenue increased 11.68% from $109.06 million in the previous quarter. EPS increased 37.04% from $0.27 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.34 and has not changed. For the current year, the average estimate has moved up from a profit of $1.23 to a profit of $1.25 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)