CarGurus Inc (CARG)
NASDAQ:CARG
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CarGurus
(NASDAQ:CARG)
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Rating:71Outperform
Price Target:
$42.00
▲(13.94% Upside)
Action:UpgradedDate:04/23/26
The score is driven primarily by strong financial quality (profitability rebound and robust free cash flow) and constructive earnings guidance for 2026 growth. The main offsets are a stretched technical setup (overbought signals) and a valuation that looks less compelling given a ~23x P/E and no dividend yield.
Positive Factors
Strong free cash flow generation
Sustained high operating and free cash flow provides durable financial flexibility. With FCF roughly matching reported earnings and strong cash conversion, management can fund R&D, repurchases, and international expansion without immediate reliance on external financing, strengthening resilience.
Negative Factors
Top-line stagnation in 2024–2025
Revenue declines despite margin recovery signal structural demand or monetization limits. If new product uptake or international gains don’t scale as planned, margins may plateau and growth expectations could be hard to sustain, pressuring long-term expansion and reinvestment plans.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Sustained high operating and free cash flow provides durable financial flexibility. With FCF roughly matching reported earnings and strong cash conversion, management can fund R&D, repurchases, and international expansion without immediate reliance on external financing, strengthening resilience.
Read all positive factors
CarGurus (CARG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.29B
Dividend YieldN/A
Average Volume (3M)1.10M
Price to Earnings (P/E)23.4
Beta (1Y)1.05
Revenue Growth4.99%
EPS Growth705.09%
CountryUS
Employees1,282
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)0.63
Shares Outstanding75,970,604
10 Day Avg. Volume866,113
30 Day Avg. Volume1,097,006
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)9.77
Price to Sales (P/S)3.89
P/FCF Ratio12.65
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue3.86
Enterprise Value/Gross Profit4.34
Enterprise Value/Ebitda13.97
Forecast
1Y Price Target
$37.17Price Target Upside0.83% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)2.52
Revenue Forecast (FY)$1.01B
CarGurus Business Overview & Revenue Model
Company Description
CarGurus, Inc. operates an online automotive platform for buying and selling vehicles in the United States and internationally. It operates through two segments, U.S. Marketplace and Digital Wholesale. The company provides an online automotive mar...
How the Company Makes Money
CarGurus primarily makes money by selling subscription-based and performance-oriented products to auto dealers and other vehicle sellers that list inventory and advertise on its marketplace. A key revenue stream is dealer subscriptions/advertising...
CarGurus Key Performance Indicators (KPIs)
Any
Paying Dealers by Geography
Shows the distribution of paying dealers across different regions, highlighting market penetration and potential areas for expansion or increased competition.
Shows the distribution of paying dealers across different regions, highlighting market penetration and potential areas for expansion or increased competition.
Data provided by:
The Fly
The FlyCarGurus Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call emphasized broad-based, multi-quarter growth — including mid-teens revenue growth, strong adjusted EBITDA expansion, accelerating international performance, increasing dealer adoption and a slate of AI-driven product launches with early strong engagement. Management also announced disciplined capital returns. The primary negatives are near-term margin compression due to planned reinvestment, higher operating expenses in Q4, discrete CarOffer wind-down costs and that AI-driven discovery remains a small portion of traffic today. Overall, the positives (revenue and profitability growth, product traction, dealer and international momentum, and cash returns) materially outweigh the lowlights tied to purposeful reinvestment and early-stage AI monetization.Positive Updates
Strong Revenue Growth
Full year 2025 revenue of $907M, up 14% year-over-year; Q4 2025 revenue of $241M, up 15% year-over-year and at the high end of guidance.
Negative Updates
Near-term Margin Compression from Investments
Guidance for 2026 anticipates full-year adjusted EBITDA margins compressing ~1.5 to 2.5 percentage points versus 2025 as the company increases investment in product, technology and AI product introductions.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Revenue Growth
Full year 2025 revenue of $907M, up 14% year-over-year; Q4 2025 revenue of $241M, up 15% year-over-year and at the high end of guidance.
Read all positive updates
Company Guidance
CarGurus guided Q1 2026 revenue of $240.5M–$245.5M (up 13%–16% YoY), non‑GAAP adjusted EBITDA of $72M–$80M (up 5%–16% YoY), non‑GAAP EPS of $0.52–$0.58, diluted weighted‑average shares of ~94M, and noted ~ $1M of ongoing quarterly CarOffer expense will be absorbed; for full‑year 2026 they expect revenue growth of 10%–13% YoY (against 2025 revenue of $907M, implying roughly $998M–$1,026M) and forecast non‑GAAP adjusted EBITDA margin compression of ~1.5–2.5 percentage points versus 2025 (2025 adj. EBITDA margin was ~35%, implying ~32.5%–33.5% in 2026), with management saying the midpoint of Q1 guidance is a reasonable proxy for the first three quarters and Q4 margins should be higher seasonally.CarGurus Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
66
Positive
Cash Flow
86
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 938.98M | 894.38M | 914.24M | 1.66B | 951.37M |
| Gross Profit | 835.54M | 738.95M | 651.45M | 657.55M | 657.36M |
| EBITDA | 235.11M | 173.27M | 81.10M | 167.76M | 200.01M |
| Net Income | 155.90M | 20.97M | 31.10M | 193.78M | 109.24M |
Balance Sheet | |||||
| Total Assets | 661.90M | 824.54M | 918.93M | 927.10M | 931.57M |
| Cash, Cash Equivalents and Short-Term Investments | 190.52M | 304.19M | 312.09M | 469.52M | 321.94M |
| Total Debt | 190.83M | 192.74M | 194.39M | 66.42M | 70.70M |
| Total Liabilities | 287.70M | 282.85M | 302.07M | 155.74M | 251.93M |
| Stockholders Equity | 374.20M | 541.69M | 616.85M | 734.61M | 516.84M |
Cash Flow | |||||
| Free Cash Flow | 288.90M | 180.32M | 83.32M | 238.84M | 84.42M |
| Operating Cash Flow | 295.28M | 255.49M | 124.53M | 256.11M | 98.29M |
| Investing Cash Flow | -29.32M | -72.97M | -61.56M | 72.73M | -68.15M |
| Financing Cash Flow | -383.76M | -168.63M | -253.64M | -92.62M | 17.81M |
CarGurus Technical Analysis
Positive
36.86
Price Trends
32.29
Positive
34.20
Positive
34.38
Positive
Market Momentum
0.86
Negative
66.36
Neutral
87.59
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CARG, the sentiment is Positive. The current price of 36.86 is above the 20-day moving average (MA) of 34.89, above the 50-day MA of 32.29, and above the 200-day MA of 34.38, indicating a bullish trend. The MACD of 0.86 indicates Negative momentum. The RSI at 66.36 is Neutral, neither overbought nor oversold. The STOCH value of 87.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CARG.
CarGurus Risk Analysis
CarGurus disclosed 42 risk factors in its most recent earnings report. CarGurus reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CarGurus Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.54B | 13.22 | 19.96% | ― | 3.75% | 16.49% | |
74 Outperform | $510.08M | 9.83 | 54.21% | ― | 38.45% | 200.67% | |
73 Outperform | $2.26B | 13.04 | 3.51% | 0.00% | -8.24% | -11.76% | |
71 Outperform | $3.29B | 23.44 | 39.29% | ― | 4.99% | 705.09% | |
64 Neutral | $1.41B | 15.50 | 5.63% | ― | 24.49% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
CARG
CarGurus
37.04
9.03
32.24%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.