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what it is
CarGurus helps you find, price, buy, and sell cars online while charging dealers to reach all that traffic.
how it gets paid
Last year Cargurus made $907M in revenue.
why it's growing
Revenue grew 276.2% last year. 92.3% gross margin is the quiet part out loud.
what just happened
Latest quarter revenue hit $241M, up 15% vs. prior year, while EPS rose to $0.51.
At a glance
B+ balance sheet — decent shape, but not bulletproof
20/100 earnings predictability — expect surprises
23.2x trailing p/e — priced about right
20.0% return on capital — nothing to write home about
$1.02 fy2024 eps est
xvary composite: 62/100 — average
What they do
CarGurus helps you find, price, buy, and sell cars online while charging dealers to reach all that traffic.
CarGurus has 29.3 million average monthly U.S. visitors and 24,692 paying U.S. dealers. That flywheel matters because more shoppers bring more dealers, and more dealers bring the largest inventory selection on U.S. listings sites. If you are buying a car, you go where the cars are, and that habit is hard to break.
How they make money
$907M
annual revenue · their business grew +276.2% last year
total revenue
$907M
+276.2%
The products that matter
dealer advertising marketplace
Marketplace & Advertising
$~680M · ~75% of revenue
This is the core engine at roughly $680M of revenue. It grew 14% even while total revenue was down 2.2%, which tells you where the business still has real demand.
main engine
dealer software and checkout tools
Digital Retail & Services
$~227M · ~25% of revenue
This bucket is about $227M of revenue and was flat. In human-speak: the mix shift story exists, but it is not carrying the company yet.
flat mix shift
sell-your-car lead generation
Instant Market Value
92.3% gross margin backdrop
Tools that help consumers value and sell cars keep inventory and traffic moving through a platform already earning a 92.3% gross margin. They matter because the marketplace only works if shoppers see cars worth clicking.
inventory funnel
Key numbers
20.0%
return on capital
Return on capital → profit earned on the money used in the business → so what: every $1 invested in the business produces $0.20 in profit, which is strong for an online marketplace.
92.3%
gross margin
Gross margin → revenue left after direct costs → so what: software-like economics give CarGurus room to spend on growth and still keep profits.
19.4%
operating margin
Operating margin → profit after running the business → so what: this is not a traffic-only story anymore; it already earns real money.
23.2x
trailing p/e
P/E → price compared with annual earnings → so what: you are paying a middle-of-the-road multiple for a business that just reset earnings higher.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 2 — safer than 80% of stocks
- price stability 20 / 100
- long-term debt $184M (6% of capital)
B+ — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for CARG right now.
source: institutional data · return history unavailable
What just happened
beat estimates
Latest quarter revenue hit $241M, up 15% vs. prior year, while EPS rose to $0.51.
The clean part of the story is margin. Gross margin was 92.3%, which means most new revenue falls through with very little direct cost.
$241M
revenue
$0.51
eps
92.3%
gross margin
the number that mattered
92.3% gross margin is the quiet part out loud. This business looks more like software than auto retail.
source: company earnings report, 2026
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What could go wrong
the #1 risk is slower dealer budget growth hitting Marketplace & Advertising. This is the segment that still drives roughly $680M of revenue, so when dealers pull back, the story changes fast.
med
Growth deceleration
Management guided 2026 revenue growth to 10–13% after 14% growth in 2025. That is not a collapse. It is still a clear slowdown, and the stock already told you it cares.
At 23.2x earnings, slower growth can compress the multiple even if the business stays profitable.
med
Dealer-spend dependence
Marketplace & Advertising is about 75% of revenue, or roughly $680M. Dealers buy visibility when inventory moves and shoppers show up. If used-car demand softens, their marketing budgets usually notice before investors do.
Because total revenue is $894M, pressure on the marketplace segment hits the consolidated number quickly.
med
Digital retail is not carrying the load yet
Digital Retail & Services is roughly 25% of revenue, or about $227M, and it was flat. The diversification story sounds nice. The data says the second engine is not accelerating yet.
If that segment stays flat while marketplace growth cools, the business looks more cyclical and less like software.
With roughly $680M of the $894M revenue base tied to Marketplace & Advertising, you do not need a disaster to pressure the thesis. You just need dealers to spend less.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
Q1 2026 earnings on May 14, 2026
Consensus EPS is $0.55. Company revenue guidance is $240.5M–$245.5M. The report matters because it is the first read on whether 10–13% full-year growth already looks generous.
trend
Marketplace growth versus total company growth
Marketplace & Advertising grew 14% while total revenue was down 2.2% last year. If that gap narrows the wrong way, the strongest part of the business is losing altitude.
risk
Digital Retail & Services staying flat
About 25% of revenue came from this segment and it was flat. You want the diversification piece to start helping, not just existing.
metric
What the $250M buyback actually retires
Management authorized $250M for repurchases. If growth stays softer, capital return becomes a bigger part of the shareholder story.
Analyst rankings
earnings predictability
20 / 100
In human-speak, analysts do not see this as a clean, clockwork earnings story.
risk rank
2
A rank of 2 means the balance sheet and business profile look safer than most stocks, even if the narrative is choppier.
price stability
20 / 100
Low price stability means the market changes its mind often. Welcome to a stock where guidance matters as much as results.
source: institutional data
Institutional activity
institutional ownership data for CARG is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$34
current price
n/a
target midpoint · n/a from current
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