CarGurus: Strong Market Position and Growth Potential Justify Buy Rating

BTIG analyst Marvin Fong maintained a Buy rating on CarGurus (CARG – Research Report) today and set a price target of $40.00.

Marvin Fong has given his Buy rating due to a combination of factors that highlight CarGurus’ strong market position and growth potential. The company has demonstrated impressive execution by raising its marketplace guidance, a feat not matched by its peers who are struggling with tariff challenges. This success is attributed to dealers preferring CarGurus for its effective partnership and advanced analytics tools, leading to a significant increase in dealer count in the U.S.
Furthermore, CarGurus has shown robust revenue growth, with marketplace revenue exceeding expectations and advertising revenue growing at a double-digit rate. Despite some challenges with the CarOffer platform, the potential for monetizing analytics tools presents a promising new revenue stream. Additionally, the company’s strategic reinvestment in marketing and international product innovation is expected to sustain its competitive edge, even if it temporarily impacts EBITDA margin expansion. Overall, CarGurus’ ability to gain market share and its positive financial outlook underpin Fong’s Buy rating.

According to TipRanks, Fong is an analyst with an average return of -4.0% and a 39.68% success rate. Fong covers the Consumer Cyclical sector, focusing on stocks such as Mercadolibre, Carvana Co, and Etsy.