Analyst Ronald Josey from Citi maintained a Hold rating on CarGurus and keeping the price target at $41.00.
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Ronald Josey has given his Hold rating due to a combination of factors influencing CarGurus’ performance. The company reported third-quarter results that exceeded expectations in terms of total revenue and adjusted EBITDA, with revenue reaching $239 million, which was slightly above the consensus. The U.S. Marketplace Dealer revenue showed a healthy growth of 12% year-over-year, aligning with projections, and there was a notable increase in U.S. paying dealers and average revenue per subscriber dealer.
Despite these positive results, Josey is cautious due to broader macroeconomic conditions affecting the used vehicle market and the company’s need to balance investments with margin expansion. Additionally, while the guidance for the fourth quarter was slightly above expectations, the adoption of new products and the benefits from winding down CarOffer are still areas of focus. These factors contribute to a neutral outlook, leading to the Hold rating as the company navigates these challenges and opportunities.
According to TipRanks, Josey is a 5-star analyst with an average return of 22.6% and a 58.14% success rate. Josey covers the Communication Services sector, focusing on stocks such as Alphabet Class A, Meta Platforms, and Zillow Group Class A.