CarGurus (CARG) AI Stock Analysis

• Market Cap: $3.38B
• Dividend Yield: N/A
• Average Volume (3M): 976.26K
• Price to Earnings (P/E): 23.5
• Beta (1Y): 1.28
• Revenue Growth: 4.21%
• EPS Growth: N/A
• Country: US
• Employees: 1,282
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 0.57
• Shares Outstanding: 81,236,950
• 10 Day Avg. Volume: 1,098,339
• 30 Day Avg. Volume: 976,260
• PEG Ratio: 34.61
• Price to Book (P/B): 7.05
• Price to Sales (P/S): 4.27
• P/FCF Ratio: 21.18
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 4.02
• Enterprise Value/Gross Profit: 4.56
• Enterprise Value/Ebitda: 15.68
• 1Y Price Target: $41.44
• Price Target Upside: 16.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 2.18
• Revenue Forecast (FY): $931.62M

• Rating: 68 Neutral
• Price Target: $36.00 ▲(0.98% Upside)

CarGurus' overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting growth and strategic initiatives. However, technical analysis indicates bearish trends, and the valuation suggests potential overvaluation, which tempers the overall score.

Positive Factors

International Expansion

Strong international growth, particularly in Canada and the U.K., indicates successful market penetration and potential for further expansion.

Product Innovation

Introduction of innovative tools like PriceVantage enhances dealer profitability and inventory turnover, strengthening competitive advantage.

Cash Flow Management

Robust cash flow management ensures financial flexibility and supports strategic investments and operational resilience.

Negative Factors

Revenue Growth Volatility

Inconsistent revenue growth could indicate challenges in sustaining market demand or competitive pressures, affecting long-term stability.

CarOffer Wind Down

Winding down CarOffer may lead to revenue loss and reflects challenges in diversifying revenue streams, impacting growth prospects.

Cookie Consent Regulation Impact

Regulatory changes affecting user data tracking could reduce engagement metrics, impacting advertising revenue and platform effectiveness.

CarGurus Business Overview & Revenue Model

Company Description

CarGurus (CARG) is an online automotive marketplace that connects buyers and sellers of new and used vehicles. Founded in 2006, the company operates primarily in the automotive sector, providing a platform for consumers to research and compare car listings, read reviews, and connect with local dealerships. CarGurus aims to simplify the car buying process while offering tools such as price analysis, vehicle history reports, and financing options to enhance the user experience.

How the Company Makes Money

CarGurus generates revenue primarily through its dealer services and advertising segments. The company offers subscription-based services to automotive dealers, allowing them to list their inventory on the CarGurus platform, gain access to valuable analytics, and utilize marketing tools to enhance their visibility. Additionally, CarGurus earns revenue from lead generation, where they charge dealerships for connecting them with potential buyers. The platform also provides cost-per-click advertising options for manufacturers and dealerships, further diversifying its revenue streams. Strategic partnerships with various automotive-related services, such as financing and insurance providers, contribute to its earnings by offering users integrated solutions while generating referral fees for CarGurus.

CarGurus Financial Statement Overview

Summary

CarGurus demonstrates strong financial performance with robust revenue growth and profitability metrics. The balance sheet is stable, though there is a slight increase in leverage. Cash flow generation is robust, supporting the company's operational and strategic initiatives.

Income Statement

CarGurus shows strong profitability with a high gross profit margin of 88.15% and a net profit margin of 16.41% in the TTM period. Revenue growth is robust at 79.8% TTM, indicating a significant recovery from previous declines. However, the EBIT margin has decreased compared to historical levels, suggesting potential cost management issues.

Balance Sheet

The company's debt-to-equity ratio is moderate at 0.51 TTM, indicating a balanced approach to leverage. Return on equity is strong at 34.65%, reflecting efficient use of equity. However, the equity ratio has decreased, suggesting increased reliance on debt financing.

Cash Flow

CarGurus demonstrates strong cash flow management with a free cash flow growth rate of 5.16% TTM and a high operating cash flow to net income ratio of 3.07. The free cash flow to net income ratio is also healthy at 0.93, indicating effective conversion of earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	926.42M	894.38M	914.24M	1.66B	951.37M	551.45M
Gross Profit	816.61M	738.95M	651.45M	657.55M	657.36M	508.75M
EBITDA	237.71M	173.27M	81.10M	167.76M	200.01M	104.62M
Net Income	151.99M	20.97M	31.10M	193.78M	109.24M	77.55M
Balance Sheet
Total Assets	660.47M	824.54M	918.93M	927.10M	931.57M	502.30M
Cash, Cash Equivalents and Short-Term Investments	178.83M	304.19M	312.09M	469.52M	321.94M	290.30M
Total Debt	193.26M	192.74M	194.39M	66.42M	70.70M	69.89M
Total Liabilities	285.02M	282.85M	302.07M	155.74M	251.93M	128.71M
Stockholders Equity	375.45M	541.69M	616.85M	734.61M	516.84M	373.59M
Cash Flow
Free Cash Flow	251.57M	180.32M	83.32M	238.84M	84.42M	149.21M
Operating Cash Flow	287.90M	255.49M	124.53M	256.11M	98.29M	156.74M
Investing Cash Flow	-36.33M	-72.97M	-61.56M	72.73M	-68.15M	-16.89M
Financing Cash Flow	-323.36M	-168.63M	-253.64M	-92.62M	17.81M	-10.09M

CarGurus Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 35.65
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 35.65 is above the 20-day moving average (MA) of 35.06, below the 50-day MA of 35.82, and above the 200-day MA of 33.06, indicating a neutral trend. The MACD of -0.28 indicates Negative momentum. The RSI at 53.47 is Neutral, neither overbought nor oversold. The STOCH value of 72.60 is Neutral, 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	73 Outperform	$924.07M	17.96	36.81%	―	57.83%	293.63%
YELP	70 Outperform	$1.80B	12.94	20.37%	―	5.35%	33.74%
CARG	68 Neutral	$3.38B	23.47	35.39%	―	4.21%	―
ATHM	68 Neutral	$3.09B	14.65	5.87%	6.98%	-5.54%	-14.30%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
TRVG	53 Neutral	$225.86M	82.90	1.22%	―	17.38%	―
TRUE	50 Neutral	$194.58M	-6.55	-15.37%	―	6.18%	28.04%

CarGurus Corporate Events

CarGurus Reports Strong Q3 2025 Revenue Growth

CarGurus, Inc. is a leading multinational automotive platform that facilitates buying and selling vehicles, primarily operating in the automotive shopping sector with a strong focus on data-driven solutions and consumer trust.

CarGurus Q2 2025 Earnings: Growth Amid Challenges

CarGurus’ recent earnings call painted a picture of both robust growth and strategic challenges. The company showcased strong financial growth and innovation, particularly in its core Marketplace and international businesses. However, it also faced significant hurdles with the wind-down of its CarOffer transactions business and declines in wholesale and product revenues.

CarGurus Reports Strong Q2 2025 Results and Strategic Shift

CarGurus, Inc. is a leading digital automotive marketplace that facilitates the buying and selling of vehicles, leveraging technology and data analytics to enhance the car-shopping experience for consumers and dealers alike.