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CarGurus
(NASDAQ:CARG)
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Rating:74Outperform
Price Target:
$38.00
▲(4.25% Upside)
Action:Reiterated
Date:09/06/26
The score is driven primarily by strong financial performance (notably cash flow quality and improved margins). Valuation is reasonable with a mid-teens P/E, and corporate events are modestly positive (new CFO; extended credit facility with tighter discipline). The main drag is weak technicals: price below key moving averages with negative MACD, despite near-oversold readings.
Positive Factors
Strong cash generation
Strong operating cash flow and near-complete conversion of net income into free cash flow give CarGurus internal funding capacity. This supports product investment, capital returns, and balance-sheet resilience while reducing reliance on external financing over the next several quarters.
Negative Factors
Revenue volatility
The history of large revenue swings makes the recent growth rate less certain as a durable trend. Volatility can complicate planning, reduce confidence in recurring top-line expansion, and pressure operating leverage if dealer demand weakens during a softer automotive cycle.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Strong operating cash flow and near-complete conversion of net income into free cash flow give CarGurus internal funding capacity. This supports product investment, capital returns, and balance-sheet resilience while reducing reliance on external financing over the next several quarters.
Read all positive factors
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 (CARG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.01B
Dividend YieldN/A
Average Volume (3M)875.24K
Price to Earnings (P/E)18.0
Beta (1Y)1.08
Revenue Growth6.01%
EPS Growth47.62%
CountryUS
Employees1,218
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)1.87
Shares Outstanding75,309,870
10 Day Avg. Volume766,299
30 Day Avg. Volume875,238
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$41.90Price Target Upside14.95% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)2.62
Revenue Forecast (FY)$1.01B
CarGurus Business Overview & Revenue Model
Company Description
CarGurus, Inc., established in Boston, Massachusetts, in 2005, manages a prominent online ecosystem for vehicle transactions, serving both buyers and sellers across the United States and internationally. The company's operations are divided into t...
How the Company Makes Money
CarGurus primarily makes money by selling subscription-based products and advertising services to automotive dealers and other industry participants. A core revenue stream comes from dealer subscriptions that provide access to the CarGurus marketp...
CarGurus Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call conveyed solid top-line and profitability growth (15% revenue growth, 17% adjusted EBITDA growth) driven by strong product adoption, international outperformance, and early AI-driven productivity gains. Management is investing heavily in AI, product and go-to-market (driving higher operating expenses) and has returned significant capital via buybacks (lowering cash balances). Near-term margins are expected to compress ~1.5–2.5 percentage points due to these investments, and some Q1 upside included timing and tax-related items. On balance the company demonstrated strong operational momentum and product traction while acknowledging planned investment-driven margin pressure and cash impacts from buybacks.Positive Updates
Revenue Growth
Total revenue of $244 million in Q1, up 15% year-over-year and above the midpoint of guidance.
Negative Updates
Margin Compression Guidance
Company expects full-year 2026 non-GAAP adjusted EBITDA margins to compress approximately 1.5 to 2.5 percentage points versus 2025 due to planned investments in product, technology, AI and sales & marketing.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth
Total revenue of $244 million in Q1, up 15% year-over-year and above the midpoint of guidance.
Read all positive updates
Company Guidance
Management reiterated Q2 and full‑year guidance: Q2 revenue $247–252 million (up 11%–14% YoY), Q2 non‑GAAP adjusted EBITDA $77.5–85.5 million, Q2 non‑GAAP EPS $0.57–0.64 with ~91 million diluted shares outstanding; full‑year 2026 revenue growth reiterated at 10%–13% YoY with an expected full‑year non‑GAAP adjusted EBITDA margin compression of ~1.5–2.5 percentage points versus 2025. For context, Q1 came in above midpoint with revenue $244 million (+15% YoY), non‑GAAP adjusted EBITDA $80 million (33% margin, +17% YoY), non‑GAAP gross profit $225 million (92% gross margin), non‑GAAP diluted EPS $0.58 (+21% YoY), U.S. QARSD +9% YoY, 963 net U.S. dealer adds, international revenue +39% YoY, cash $72 million (down $118 million QoQ after ~$175 million of repurchases), ~$75 million remaining on the $250 million 2026 repurchase authorization and roughly $896 million repurchased since 2022.CarGurus Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
72
Positive
Cash Flow
90
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 974.32M | 938.98M | 894.38M | 914.24M | 1.66B | 951.37M |
| Gross Profit | 887.17M | 835.54M | 738.95M | 651.45M | 657.55M | 657.36M |
| EBITDA | 277.56M | 235.11M | 173.27M | 100.16M | 167.76M | 200.01M |
| Net Income | 175.94M | 155.90M | 20.97M | 31.10M | 193.78M | 109.24M |
Balance Sheet | ||||||
| Total Assets | 555.13M | 661.90M | 824.54M | 918.93M | 927.10M | 931.57M |
| Cash, Cash Equivalents and Short-Term Investments | 122.14M | 190.52M | 304.19M | 312.09M | 469.52M | 321.94M |
| Total Debt | 185.14M | 190.83M | 192.74M | 194.39M | 66.42M | 70.70M |
| Total Liabilities | 290.77M | 287.70M | 282.85M | 302.07M | 155.74M | 251.93M |
| Stockholders Equity | 264.36M | 374.20M | 541.69M | 616.85M | 734.61M | 516.84M |
Cash Flow | ||||||
| Free Cash Flow | 309.42M | 288.90M | 180.32M | 83.32M | 238.84M | 84.42M |
| Operating Cash Flow | 318.72M | 295.28M | 255.49M | 124.53M | 256.11M | 98.29M |
| Investing Cash Flow | -27.44M | -29.32M | -72.97M | -61.56M | 72.73M | -68.15M |
| Financing Cash Flow | -401.60M | -383.76M | -168.63M | -253.64M | -92.62M | 17.81M |
CarGurus Technical Analysis
Negative
36.45
Price Trends
35.63
Negative
33.79
Negative
33.97
Negative
Market Momentum
-0.30
Positive
37.56
Neutral
11.57
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CARG, the sentiment is Negative. The current price of 36.45 is above the 20-day moving average (MA) of 36.23, above the 50-day MA of 35.63, and above the 200-day MA of 33.97, indicating a bearish trend. The MACD of -0.30 indicates Positive momentum. The RSI at 37.56 is Neutral, neither overbought nor oversold. The STOCH value of 11.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $877.82M | 7.83 | 50.29% | 1.11% | 22.75% | 144.55% | |
76 Outperform | $1.18B | 10.27 | 18.61% | ― | 1.50% | -6.82% | |
75 Outperform | $2.63B | 6.05 | 4.72% | 8.35% | -16.67% | -32.32% | |
74 Outperform | $3.01B | 18.04 | 56.25% | ― | 6.01% | 47.62% | |
69 Neutral | $2.99B | 27.35 | 6.22% | 88.60% | 26.55% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
CARG
CarGurus
33.74
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-6.12%
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CarGurus Corporate Events
Business Operations and StrategyExecutive/Board Changes
CarGurus Appoints New Chief Financial Officer Mandel
Positive
Sep 3, 2026
CarGurus, Inc., a multinational automotive marketplace operator and software-driven platform for car buyers and dealers, announced on September 3, 2026 that it has appointed Matthew Mandel as Chief Financial Officer, effective October 19, 2026. Ma...
Business Operations and StrategyStock BuybackFinancial DisclosuresPrivate Placements and Financing
CarGurus Amends Credit Facility, Extends Maturity to 2031
Positive
Aug 6, 2026
On August 6, 2026, CarGurus amended its revolving credit facility, cutting total commitments from $400 million to $200 million while extending the facility’s maturity to August 6, 2031. The amendment also raised the cap on its incremental fa...
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.