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CarGurus
(NASDAQ:CARG)
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Rating:72Outperform
Price Target:
$33.00
▼(-9.47% Downside)
Action:Reiterated
Date:09/12/26
The score is driven primarily by strong financial performance—healthy margins and excellent cash generation—supported by a generally constructive earnings outlook with reiterated double-digit revenue growth guidance and strong free-cash-flow conversion. The main drag is weak technical momentum (below key moving averages with negative MACD and low RSI), while valuation appears moderate with no dividend yield provided.
Positive Factors
Strong cash generation
Robust operating cash flow and near-complete conversion of earnings into free cash flow give CarGurus substantial internal funding capacity. This supports continued product investment, debt management and shareholder returns while reducing reliance on external financing over the next several quarters.
Negative Factors
Revenue volatility
The history of substantial revenue swings reduces confidence that the latest recovery will progress smoothly through changing automotive conditions. Volatility can make planning and investment less predictable and may limit the durability of growth even with current guidance.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Robust operating cash flow and near-complete conversion of earnings into free cash flow give CarGurus substantial internal funding capacity. This supports continued product investment, debt management and shareholder returns 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
$2.61B
Dividend YieldN/A
Average Volume (3M)1.10M
Price to Earnings (P/E)15.4
Beta (1Y)1.03
Revenue Growth6.01%
EPS Growth47.62%
CountryUS
Employees1,218
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)1.87
Shares Outstanding75,309,870
10 Day Avg. Volume1,509,647
30 Day Avg. Volume1,101,585
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 Cap1.21
Enterprise Value/Revenue3.25
Enterprise Value/Gross Profit3.57
Enterprise Value/Ebitda11.41
Forecast
1Y Price Target
$41.22Price Target Upside13.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
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:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call was predominantly positive, supported by double-digit revenue growth, strong cash-flow conversion, international momentum, expanding dealer engagement, successful early AI and product results, raised profitability expectations, and reaffirmed full-year revenue guidance. The main challenges were cautious dealer spending, ongoing dealer economic pressure, higher operating expenses, and year-over-year declines in gross and adjusted EBITDA margins.Positive Updates
Strong Second-Quarter Revenue and EBITDA Performance
Second-quarter revenue grew 13% year over year to $251 million, above the midpoint of guidance. Adjusted EBITDA increased 7% year over year to $85 million, at the high end of guidance, with a 34% adjusted EBITDA margin.
Negative Updates
Dealer Spending Remained Cautious
Dealers took a more deliberate approach to incremental spending decisions in the first half. Management attributed this to dealer margin pressure, fewer days on lot, pressure on gross profit per vehicle, and FTC-mandated all-in price-transparency requirements.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Second-Quarter Revenue and EBITDA Performance
Second-quarter revenue grew 13% year over year to $251 million, above the midpoint of guidance. Adjusted EBITDA increased 7% year over year to $85 million, at the high end of guidance, with a 34% adjusted EBITDA margin.
Read all positive updates
Company Guidance
For the third quarter, CarGurus expects revenue to be in the range of $253.5 million to $258.5 million, up between 9% to 12% year over year, respectively; non GAAP adjusted EBITDA to be in the range of $82 million to $90 million; non GAAP earnings per share to be in the range of $0.63 to $0.69; and diluted weighted average common shares outstanding to be approximately 90 million. For the full year, it is reiterating that 2026 revenue will grow in the range of 10% to 13% year over year and now expects full year non GAAP adjusted EBITDA margins to compress approximately 50 to 150-basis-points in 2020 relative to 2025.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
34.59
Negative
32.91
Negative
33.54
Negative
Market Momentum
-1.46
Positive
27.28
Positive
20.63
Neutral
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 32.04, above the 50-day MA of 34.59, and above the 200-day MA of 33.54, indicating a bearish trend. The MACD of -1.46 indicates Positive momentum. The RSI at 27.28 is Positive, neither overbought nor oversold. The STOCH value of 20.63 is Neutral, 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 (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.51B | 5.69 | 4.72% | 8.88% | -16.67% | -32.32% | |
73 Outperform | $684.00M | 6.10 | 50.29% | 1.11% | 22.75% | 144.55% | |
72 Outperform | $2.61B | 15.36 | 56.25% | ― | 6.01% | 47.62% | |
72 Outperform | $1.00B | 8.60 | 18.61% | ― | 1.50% | -6.82% | |
64 Neutral | $955.52M | -30.79 | -7.27% | ― | 9.79% | 53.33% | |
63 Neutral | $519.27M | 16.17 | 7.40% | ― | 1.08% | -6.71% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
CARG
CarGurus
28.73
-6.77
-19.07%
YELP
Yelp
18.14
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-41.78%
ATHM
AutoHome
20.72
-5.07
-19.65%
CARS
Cars
9.45
-2.38
-20.12%
EVER
EverQuote
19.39
-2.84
-12.78%
NXDR
Nextdoor Holdings
2.42
0.42
21.00%
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.