CarGurus (CARG) AI Stock Analysis

• Market Cap: $3.44B
• Dividend Yield: N/A
• Average Volume (3M): 785.65K
• Price to Earnings (P/E): 97.3
• Beta (1Y): 1.31
• Revenue Growth: 0.63%
• EPS Growth: 15.34%
• Country: US
• Employees: 1,282
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Internet Content & Information
• EPS (TTM): 0.46
• Shares Outstanding: 84,630,380
• 10 Day Avg. Volume: 781,871
• 30 Day Avg. Volume: 785,654
• PEG Ratio: -0.83
• Price to Book (P/B): 2.26
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.95
• Enterprise Value/Market Cap: 0.37
• Enterprise Value/Revenue: 0.35
• Enterprise Value/Gross Profit: 1.65
• Enterprise Value/Ebitda: 2.18
• 1Y Price Target: $38.33
• Price Target Upside: 10.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 67 Neutral
• Price Target: $34.00 ▼(-1.96%Downside)

CarGurus' solid financial performance and positive earnings call guidance contribute significantly to its overall score. However, high valuation concerns and mixed technical indicators temper the outlook. The company's strategic focus on marketplace and international growth, despite challenges in other segments, positions it for potential future gains.

Positive Factors

International Expansion

International markets are growing revenue much faster than U.S. operations, with around 20% year-over-year growth.

Market Share Growth

CarGurus achieved its highest dealer growth since Covid and is helping the company gain market share.

Product Innovation

New products like Dealer Data Insights, Digital Deal, and Sell My Car TDO are gaining traction and supporting the marketplace momentum.

Negative Factors

Digital Wholesale Challenges

Digital Wholesale pressures are likely to continue with volumes expected to decline sequentially as CarGurus reevaluates its operating model.

Revenue Growth Concerns

The price target is lowered to account for slowing growth in marketplace subscription revenue.

Slowing Margin Expansion

The margin expansion trajectory is likely to slow due to greater marketing and international product investments.

CarGurus Business Overview & Revenue Model

Company Description

CarGurus, Inc. operates an online automotive marketplace connecting buyers and sellers of new and used cars in the United States and internationally. The company provides consumers an online automotive marketplace where they can search for new and used car listings from its dealers, as well as sell their car in the United States marketplace. Its marketplace connects dealers to a large audience of informed and engaged consumers. The company operates online marketplaces under the CarGurus brand in Canada and the United Kingdom; and the Autolist and PistonHeads online marketplaces as independent brands in the United States and the United Kingdom. CarGurus, Inc. was founded in 2005 and is headquartered in Cambridge, Massachusetts.

How the Company Makes Money

CarGurus generates revenue primarily through its marketplace and advertising services. The company earns money by charging subscription fees to dealerships that list their inventory on its platform, offering them enhanced visibility and access to a large audience of potential buyers. Additionally, CarGurus provides advertising solutions for car manufacturers and dealers, including display advertising and lead generation services. A significant portion of its revenue also comes from partnerships and affiliate programs, where it earns commissions from third-party services integrated into its platform, such as financing and insurance products.

CarGurus Financial Statement Overview

Summary

CarGurus demonstrates solid financial health with strong gross profit margins and efficient cash flow management. Despite the healthy balance sheet, challenges in consistent revenue growth and asset stability need attention. Profitability and asset utilization improvements are critical for further enhancement.

Income Statement

The income statement shows a robust gross profit margin of 84.2% TTM, supported by a consistent gross profit over the past periods. However, revenue growth has been inconsistent, with a decline in 2022 followed by a slight recovery. The net profit margin is modest at 4.3% TTM, indicating room for profitability improvement. EBIT and EBITDA margins indicate operational efficiency, with TTM figures at 17.7% and 21.2% respectively.

Balance Sheet

The balance sheet displays a stable financial position with a debt-to-equity ratio of 0.49 TTM, indicating manageable leverage. Return on Equity is modest at 9.6% TTM, suggesting moderate returns for equity holders. The equity ratio stands at 58.3% TTM, highlighting a strong equity base. However, declining total assets over recent periods could pose a risk if not addressed.

Cash Flow

Cash flow analysis reveals strong free cash flow growth and a solid operating cash flow to net income ratio of 7.0 TTM, indicating efficient cash generation relative to earnings. The free cash flow to net income ratio is high at 5.7 TTM, reflecting effective cash management. However, fluctuations in investing and financing cash flows suggest some volatility in capital allocation strategies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	903.75M	894.38M	914.24M	1.66B	951.37M	551.45M
Gross Profit	761.46M	738.95M	651.45M	657.55M	657.36M	508.75M
EBITDA	191.82M	173.27M	81.10M	167.76M	200.01M	104.62M
Net Income	38.72M	20.97M	31.10M	84.39M	109.24M	77.55M
Balance Sheet
Total Assets	689.12M	824.54M	918.93M	927.10M	931.57M	502.30M
Cash, Cash Equivalents and Short-Term Investments	172.86M	304.19M	312.09M	469.52M	321.94M	290.30M
Total Debt	195.43M	192.74M	194.39M	66.42M	70.70M	69.89M
Total Liabilities	287.06M	282.85M	302.07M	155.74M	251.93M	128.71M
Stockholders Equity	402.05M	541.69M	616.85M	734.61M	516.84M	373.59M
Cash Flow
Free Cash Flow	219.27M	180.32M	83.32M	238.84M	84.42M	149.21M
Operating Cash Flow	271.41M	255.49M	124.53M	256.11M	98.29M	156.74M
Investing Cash Flow	-67.45M	-72.97M	-61.56M	72.73M	-68.15M	-16.89M
Financing Cash Flow	-277.07M	-168.63M	-253.64M	-90.04M	17.81M	-10.09M

CarGurus Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 34.68
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 34.68 is above the 20-day moving average (MA) of 32.88, above the 50-day MA of 31.75, and above the 200-day MA of 33.07, indicating a bullish trend. The MACD of 0.75 indicates Negative momentum. The RSI at 66.33 is Neutral, neither overbought nor oversold. The STOCH value of 81.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CARG.

CarGurus Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EVER	75 Outperform	$886.92M	24.18	32.17%	―	113.43%	―
ATHM	72 Outperform	$3.27B	14.86	6.55%	8.59%	-5.77%	-15.07%
CARG	67 Neutral	$3.44B	97.31	7.98%	―	0.63%	15.34%
Z	66 Neutral	$17.41B	―	-1.72%	―	14.96%	49.24%
Sector *	64 Neutral	£1.70B	10.46	6.12%	3.13%	0.58%	-32.48%
NBIS	58 Neutral	$10.97B	189.78	-10.51%	―	-97.73%	-217.89%
TRUE	55 Neutral	$166.59M	―	-26.46%	―	10.18%	1.47%

CarGurus Corporate Events

CarGurus Holds Annual Stockholders Meeting on Key Proposals

On June 4, 2025, CarGurus, Inc. held its annual stockholders meeting to vote on several key proposals. The stockholders elected Class II directors, ratified the appointment of Ernst & Young LLP as independent auditors, approved executive compensation for 2024, and decided to hold annual advisory votes on executive compensation. These decisions reflect the company’s ongoing commitment to governance and transparency, potentially impacting its operational strategies and stakeholder relations.

The most recent analyst rating on (CARG) stock is a Buy with a $42.00 price target. To see the full list of analyst forecasts on CarGurus stock, see the CARG Stock Forecast page.