CarGurus (CARG) Risk Analysis

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Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning.

CarGurus disclosed 42 risk factors in its most recent earnings report. CarGurus reported the most risks in the “Ability to Sell” category.

Risk Overview Q4, 2025

Risk Distribution

26% Ability to Sell

24% Finance & Corporate

21% Tech & Innovation

14% Legal & Regulatory

12% Production

2% Macro & Political

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.

Risk Change Over Time

2022

S&P500 Average

Sector Average

Risks removed

Risks added

Risks changed

CarGurus Risk Factors

New Risk (0)

Risk Changed (0)

Risk Removed (0)

No changes from previous report

The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.

The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.

Risk Highlights Q4, 2025

Main Risk Category

Ability to Sell

With 11 Risks

Ability to Sell

With 11 Risks

Number of Disclosed Risks

-3

From last report

S&P 500 Average: 31

-3

From last report

S&P 500 Average: 31

Recent Changes

20Risks added

21Risks removed

20Risks changed

Since Dec 2025

20Risks added

21Risks removed

20Risks changed

Since Dec 2025

Number of Risk Changed

+19

From last report

S&P 500 Average: 3

+19

From last report

S&P 500 Average: 3

See the risk highlights of CarGurus in the last period.

Risk Word Cloud

The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.

Risk Factors Full Breakdown - Total Risks 42

Ability to Sell

Total Risks: 11/42 (26%)Above Sector Average

Competition2 | 4.8%

Competition - Risk 1

Changed

We participate in a highly competitive market

And pressure from existing and new companies may adversely affect our business and operating results.

Competition - Risk 2

Added

Expanded Discussion – Competitive Market

We operate in a highly competitive market with numerous companies offering similar products and services. Competitive pressures could force us to lower prices or increase spending on technology and marketing, which may adversely affect our profitability.

Demand4 | 9.5%

Demand - Risk 1

Added

Expanded Discussion – Concentrated Voting Control

Our founder and key insiders hold a majority of voting power through Class B shares. This concentrated control may prevent shareholders from influencing corporate decisions and could result in transactions that are not in the best interests of other stockholders.

Demand - Risk 2

Added

Expanded Discussion – Advertising Revenue and Market Demand

Our revenue from advertising is sensitive to consumer traffic and economic conditions. Decreases in consumer visits, reductions in advertiser spending, and changes in overall market demand due to macroeconomic factors could harm our financial performance.

Demand - Risk 3

Changed

Our business is subject to risks related to the larger automotive industry ecosystem

Which could have a material adverse effect on our business, revenue, results of operations, and financial condition.

Demand - Risk 4

Changed

Seasonality and other factors

May cause fluctuations in our operating results and our marketing spend.

Sales & Marketing4 | 9.5%

Sales & Marketing - Risk 1

Changed

We may be subject to disputes regarding the accuracy of the pricing and valuation products and features of our marketplaces

No further details provided in this bullet.

Sales & Marketing - Risk 2

Changed

If we are unable to provide a compelling experience to consumers on our marketplaces

The number of connections between consumers and dealers using our marketplaces may decline and our business and financial results would be materially and adversely affected.

Sales & Marketing - Risk 3

Changed

Our ability to attract consumers to our websites and to provide certain services to our customers

Depends on the collection of consumer data from various sources, which may be restricted by consumer choice, privacy restrictions, and developments in laws, regulations, and industry standards.

Sales & Marketing - Risk 4

Added

Expanded Discussion – Relationships with Dealers

Our business is substantially dependent on our relationships with dealers. A significant source of our revenue comes from subscription fees paid by dealers. Factors such as dealers terminating subscriptions, dealer closures, or consolidations, and changes in pricing or subscription fees can materially affect our business and financial results. Additionally, declines in the number or consolidated purchasing power of dealers may reduce demand for our products and services.

Brand / Reputation1 | 2.4%

Brand / Reputation - Risk 1

Added

Expanded Discussion – Broader Automotive Ecosystem

Decreases in consumer demand for automobiles, supply chain challenges, changes in credit availability, and shifts in industry dynamics can adversely affect dealers and manufacturers, thereby negatively impacting our business.

Finance & Corporate

Total Risks: 10/42 (24%)Below Sector Average

Share Price & Shareholder Rights4 | 9.5%

Share Price & Shareholder Rights - Risk 1

Changed

Our founder controls a majority of the voting power of our outstanding capital stock

And therefore has control over key decision-making and could control our actions in a manner that conflicts with the interests of other stockholders.

Share Price & Shareholder Rights - Risk 2

Changed

The trading price of our Class A common stock has been and may continue to be volatile

And the value of our stockholders’ investment in our stock could decline.

Share Price & Shareholder Rights - Risk 3

Changed

There can be no assurance that we will continue to repurchase shares

Or that our share repurchase program will enhance stockholder value, and share repurchases could affect the price of our Class A common stock.

Share Price & Shareholder Rights - Risk 4

Added

Expanded Discussion – Stock Price Volatility and Share Repurchase Programs

The trading price of our Class A common stock may remain volatile due to various factors. Although we have a share repurchase program, there is no assurance that repurchases will enhance long-term stockholder value.

Accounting & Financial Operations4 | 9.5%

Accounting & Financial Operations - Risk 1

Added

Certain of our key business metrics are subject to inherent challenges in measurement

And real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.

Accounting & Financial Operations - Risk 2

Added

Our future revenue is uncertain

Including due to potential macroeconomic effects, such as financial market volatility and disruption, inflationary concerns, changes in tax laws and regulations, interest and currency exchange rates, uncertain economic conditions in the U.S. and abroad, and the imposition of new or increased tariffs by the U.S. or foreign governments.

Accounting & Financial Operations - Risk 3

Added

Summary Risk Factors

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, operating results, cash flow, and prospects. These risks are discussed more fully below and include, but are not limited to, risks related to:

Accounting & Financial Operations - Risk 4

We expect our results of operations to fluctuate on a quarterly and annual basis

Debt & Financing1 | 2.4%

Debt & Financing - Risk 1

Changed

We may require additional capital to pursue our business objectives

And respond to business opportunities, challenges, or unforeseen circumstances. If we are unable to generate sufficient cash flows or if capital is not available to us, our business, operating results, financial condition, and prospects could be adversely affected.

Corporate Activity and Growth1 | 2.4%

Corporate Activity and Growth - Risk 1

Added

Expanded Discussion – Operational Fluctuations

Our results of operations may fluctuate significantly from quarter to quarter due to macroeconomic factors, seasonal variability, and changes in dealer subscriptions and advertiser spending.

Tech & Innovation

Total Risks: 9/42 (21%)Above Sector Average

Innovation / R&D2 | 4.8%

Innovation / R&D - Risk 1

Changed

Any inability by us to develop new products, adapt to new technologies, or achieve widespread consumer and dealer adoption of those products

Could negatively impact our business and financial results.

Innovation / R&D - Risk 2

Added

Expanded Discussion – Product Development and Innovation

Any inability by us to develop new products, or delays in adapting to technological changes, including challenges in integrating AI into our offerings, could negatively impact our business. Our future success depends on continued innovation and the adoption of our new products by consumers and dealers.

Trade Secrets1 | 2.4%

Trade Secrets - Risk 1

Changed

Failure to adequately protect our intellectual property

Could harm our business and operating results.

Cyber Security1 | 2.4%

Cyber Security - Risk 1

Added

Expanded Discussion – Data Misappropriation and Cybersecurity

We face risks from third parties misappropriating our proprietary data via website crawling, scraping or other means. In addition, evolving technologies including AI could amplify these risks and increase our vulnerability to cyberattacks and data breaches, which could harm our reputation and operations.

Technology5 | 11.9%

Technology - Risk 1

Added

Expanded Discussion – Internet Search Engine Dependence

We rely heavily on internet search engines like Google, Bing, and Yahoo! to attract consumers. Changes in search engine algorithms, competitors’ SEO efforts, or the emergence of AI-driven search results could reduce our website traffic and adversely affect our business.

Technology - Risk 2

Changed

A significant disruption in service on our websites or mobile applications

Could damage our reputation and result in a loss of consumers, which could harm our business, brands, operating results, and financial condition.

Technology - Risk 3

Added

Expanded Discussion – Information Technology and System Disruptions

Disruptions in our IT systems, including those caused by cyberattacks, natural disasters, or failures at third-party service providers, could lead to loss of data, impaired operations, and reputational damage.

Technology - Risk 4

Changed

We rely, in part, on internet search engines to drive traffic to our websites

And if we fail to appear prominently in the search results, our traffic would decline and our business would be adversely affected.

Technology - Risk 5

We may be unable to halt the operations of websites that aggregate or misappropriate our data

Legal & Regulatory

Total Risks: 6/42 (14%)Below Sector Average

Regulation3 | 7.1%

Regulation - Risk 1

Added

18 Item 1A. Risk Factors. Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, some of which have previously occurred and any of which may occur in the future, together with all of the other information contained in this Annual Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and related notes, before evaluating our business. Our business, financial condition, operating results, cash flow, and prospects could be materially and adversely affected by any of these risks or uncertainties. In that event, the trading price of our Class A common stock could decline. See “Special Note Regarding Forward-Looking Statements.”

Regulation - Risk 2

Added

Expanded Discussion – Regulatory and Compliance Risks

We are subject to complex regulatory requirements related to data privacy, taxation, and other legal areas. Changes in laws or regulatory interpretations could lead to increased compliance costs, litigation, or adverse financial effects.

Regulation - Risk 3

Changed

We are subject to a complex framework of laws and regulations

Many of which are unsettled, still developing, and contradictory, and could in the future subject us to claims, challenge our business model, or otherwise harm our business.

Litigation & Legal Liabilities3 | 7.1%

Litigation & Legal Liabilities - Risk 1

Added

Litigation and other legal proceedings may adversely affect our business, financial condition, and results of operations

Litigation & Legal Liabilities - Risk 2

Added

Expanded Discussion – Litigation and Legal Proceedings

We may incur costs in connection with litigation, regulatory investigations, and other legal proceedings. Such events could divert management’s attention, incur substantial liabilities, and adversely affect our financial performance.

Litigation & Legal Liabilities - Risk 3

Changed

Failure to deal effectively with fraud or other illegal activity

Could harm our business.

Production

Total Risks: 5/42 (12%)Below Sector Average

Employment / Personnel1 | 2.4%

Employment / Personnel - Risk 1

Changed

We depend on key personnel to operate our business

And if we are unable to retain, attract, and integrate highly qualified personnel, or if we experience turnover of our key personnel, our ability to develop and successfully grow our business could be materially and adversely affected.

Supply Chain4 | 9.5%

Supply Chain - Risk 1

Changed

We and our third-party service providers collect, process, store, transfer, share, disclose, and use consumer information and other data

And the actual or perceived failure to protect such information and data or respect users’ privacy could expose us to liability and adversely affect our reputation, brands, business, and operating results.

Supply Chain - Risk 2

Added

Expanded Discussion – Dependence on Third-Party Data Providers

Our ability to maintain a robust marketplace depends on reliable data from third-party sources. Interruptions or declines in data quality and availability could degrade the consumer experience and adversely affect our business.

Supply Chain - Risk 3

Changed

If we fail to maintain or increase the number of dealers that pay subscription fees to us

Or fail to maintain or increase the fees paid to us for subscriptions, our business and financial results would be materially and adversely affected.

Supply Chain - Risk 4

Changed

Our business is substantially dependent on our relationships with dealers

If a significant number of dealers terminate their subscriptions with us and/or dealer closures or consolidations occur that reduce demand for our products, our business and financial results would be materially and adversely affected.

Macro & Political

Total Risks: 1/42 (2%)Below Sector Average

International Operations1 | 2.4%

International Operations - Risk 1

Added

Our international operations

Involve risks that may differ from, or are in addition to, our domestic operational risks.

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?

Risk factors are any situations or occurrences that could make investing in a company risky.

The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.

They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.

It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.

How do companies disclose their risk factors?

Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.

Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.

Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.

According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.

How can I use TipRanks risk factors in my stock research?

Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.

You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.

Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.

A simplified analysis of risk factors is unique to TipRanks.

What are all the risk factor categories?

TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.

1. Financial & Corporate

Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.

2. Legal & Regulatory

Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
Regulation – risks related to compliance, GDPR, and new legislation.
Environmental / Social – risks related to environmental regulation and to data privacy.
Taxation & Government Incentives – risks related to taxation and changes in government incentives.

3. Production

Costs – risks related to costs of production including commodity prices, future contracts, inventory.
Supply Chain – risks related to the company’s suppliers.
Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.

4. Technology & Innovation

Innovation / R&D – risks related to innovation and new product development.
Technology – risks related to the company’s reliance on technology.
Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.

5. Ability to Sell

Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
Competition – risks related to the company’s competition including substitutes.
Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
Brand & Reputation – risks related to the company’s brand and reputation.

6. Macro & Political

Economy & Political Environment – risks related to changes in economic and political conditions.
Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
International Operations – risks related to the global nature of the company.
Capital Markets – risks related to exchange rates and trade, cryptocurrency.