CarGurus (CARG) AI Stock Analysis

• Market Cap: $3.20B
• Dividend Yield: N/A
• Average Volume (3M): 966.35K
• Price to Earnings (P/E): 26.1
• Beta (1Y): 1.19
• Revenue Growth: 4.80%
• EPS Growth: N/A
• Country: US
• Employees: 1,282
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Internet Content & Information
• EPS (TTM): 0.57
• Shares Outstanding: 84,630,380
• 10 Day Avg. Volume: 1,420,975
• 30 Day Avg. Volume: 966,350
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 3.61
• Enterprise Value/Gross Profit: 4.22
• Enterprise Value/Ebitda: 18.04
• 1Y Price Target: $38.33
• Price Target Upside: 18.34% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 74 Outperform
• Price Target: $36.00 ▲(11.15% Upside)

CarGurus demonstrates strong financial performance and innovation, particularly in its core Marketplace and international businesses. The earnings call highlighted robust growth and strategic initiatives, though challenges in the CarOffer segment and inconsistent revenue growth pose risks. Technical indicators suggest a stable trend, but potential bearish momentum should be monitored.

Positive Factors

Dealer Growth

U.S dealer count rose by 325, 50 ahead of expectation, and international dealer count was up impressively, rising by almost 400 dealers.

Financial Performance

CARG delivered upside on both revenue and Adjusted EBITDA as the marketplace business remains robust.

Market Position

CarGurus remains the No. 1 most visited listing site in the U.S., with nearly 85 million average monthly sessions and 34 million unique visitors.

Negative Factors

Competitive Threat

Competitive risk from Amazon remains an overhang.

Macro Risks

Macro uncertainty may cause dealers to reduce advertising expenditures with many consumers pulling forward purchase plans.

Strategic Risks

A major development in the quarter was the strategic decision to wind down the transaction side of the CarOffer business.

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 advertising and subscription services. The company earns money by charging dealerships for premium placement of their vehicle listings on the CarGurus platform, which enhances visibility and attracts more potential buyers. Additionally, CarGurus offers subscription-based services to dealerships, providing them with tools and analytics to optimize their inventory management and marketing strategies. The company also partners with third-party service providers to offer financing and insurance options, generating referral fees from these partnerships. Overall, CarGurus' revenue model is heavily reliant on its relationships with automotive dealerships and the effectiveness of its platform in driving sales.

CarGurus Financial Statement Overview

Summary

CarGurus exhibits solid financial health with strong gross profit margins and efficient cash flow management. While the company maintains a healthy balance sheet with manageable leverage, attention is needed on asset base stability and consistent revenue growth. Overall, CarGurus is well-positioned but should focus on enhancing profitability and asset utilization to improve its financial standing further.

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	919.09M	894.38M	914.24M	1.66B	951.37M	551.45M
Gross Profit	785.63M	738.95M	651.45M	657.55M	657.36M	508.75M
EBITDA	183.81M	173.27M	81.10M	167.76M	200.01M	104.62M
Net Income	129.78M	20.97M	31.10M	193.78M	109.24M	77.55M
Balance Sheet
Total Assets	726.12M	824.54M	918.93M	927.10M	931.57M	502.30M
Cash, Cash Equivalents and Short-Term Investments	231.23M	304.19M	312.09M	469.52M	321.94M	290.30M
Total Debt	195.21M	192.74M	194.39M	66.42M	70.70M	69.89M
Total Liabilities	290.64M	282.85M	302.07M	155.74M	251.93M	128.71M
Stockholders Equity	435.48M	541.69M	616.85M	734.61M	516.84M	373.59M
Cash Flow
Free Cash Flow	255.83M	180.32M	83.32M	238.84M	84.42M	149.21M
Operating Cash Flow	272.93M	255.49M	124.53M	256.11M	98.29M	156.74M
Investing Cash Flow	-44.07M	-72.97M	-61.56M	72.73M	-68.15M	-16.89M
Financing Cash Flow	-215.19M	-168.63M	-253.64M	-92.62M	17.81M	-10.09M

CarGurus Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 32.39
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• 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 32.39 is above the 20-day moving average (MA) of 32.19, below the 50-day MA of 32.65, and below the 200-day MA of 33.33, indicating a neutral trend. The MACD of -0.46 indicates Negative momentum. The RSI at 51.70 is Neutral, neither overbought nor oversold. The STOCH value of 89.03 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
CARG	74 Outperform	$3.20B	26.09	29.24%	―	4.80%	―
ATHM	72 Outperform	$3.57B	16.70	6.05%	6.05%	-7.06%	-20.71%
EVER	71 Outperform	$855.50M	18.87	34.34%	―	92.91%	―
Z	66 Neutral	$20.43B	―	-1.34%	―	15.31%	56.19%
Sector *	61 Neutral	$17.43B	12.46	-6.01%	3.11%	1.62%	-15.64%
NBIS	58 Neutral	$17.07B	77.92	4.95%	―	-95.06%	1.92%
TRUE	47 Neutral	$165.39M	―	-23.53%	―	11.66%	-4.69%

CarGurus Corporate Events

CarGurus Winds Down CarOffer Business Amid Market Volatility

On August 6, 2025, CarGurus announced its decision to wind down its CarOffer transactions business, including Dealer-to-Dealer and Instant Max Cash Offer products, due to the current volatile pricing environment. The company plans to complete this process in the second half of 2025, incurring costs between $14 million and $19 million. This strategic shift will allow CarGurus to concentrate on AI-powered inventory intelligence and consumer vehicle sourcing, aiming to enhance technology and analytics for smarter sourcing and pricing decisions. The company reported strong financial results for the second quarter of 2025, with a 14% increase in Marketplace revenue and a net income of $22.3 million, while also expanding its share repurchase authorization to $350 million.

The most recent analyst rating on (CARG) stock is a Buy with a $32.00 price target. To see the full list of analyst forecasts on CarGurus stock, see the CARG Stock Forecast page.

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.