Dealertrack shares jump 15 percent on sales outlook
Shares of Dealertrack Technologies Inc. surged to a record close Thursday after the company said it was poised to top $800 million in sales this year.
The Lake Success software maker's stock rose $7.13, or 15.25 percent, to close at $53.89. Its prior record closing price was $49.88.
The rally came after the company, which makes software for auto dealers, released its 2014 forecast on Wednesday, saying it expects revenue to rise upward of 69 percent. Thursday an analyst who follows Dealertrack for Wells Fargo upgraded the stock, saying the company's growth is likely to increase in the coming years.
The analyst, Timothy Willi, cited strong car sales, rising dealer profitability and Dealertrack's pending acquisition of Dealer.com, a Burlington, Vt.-based website-design company. The $1-billion sale is scheduled to close March 1 and would mark Dealertrack's biggest acquisition to date.
Dealertrack is Long Island's 11th largest company by stock market value. Its annual sales have nearly doubled since 2008, to $481.5 million for 2013.
Auto dealers use its software to submit credit applications, process motor vehicle registrations and perform a variety of other functions. The company's revenue is based partly on the number of times dealers use its system to process transactions. So when car sales rise, Dealertrack's revenue typically follows suit.
Dealertrack has expanded aggressively by acquiring more than 20 companies since it was founded in 2001.