CarGurus (CARG, Financial) reported first-quarter revenue totaling $225.2 million, slightly below the consensus estimate of $226.58 million. The company witnessed a 13% year-over-year increase in its Marketplace business, reflecting solid momentum moving into 2025. The CEO emphasized the company's commitment to expanding data-driven solutions aimed at enhancing dealer profitability, providing car shoppers with a more seamless online experience, and facilitating more online transactions. This strategic approach has resulted in increased consumer and dealer engagement, along with a broader market presence.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for CarGurus Inc (CARG, Financial) is $37.38 with a high estimate of $45.00 and a low estimate of $16.00. The average target implies an upside of 33.72% from the current price of $27.95. More detailed estimate data can be found on the CarGurus Inc (CARG) Forecast page.
Based on the consensus recommendation from 13 brokerage firms, CarGurus Inc's (CARG, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for CarGurus Inc (CARG, Financial) in one year is $22.95, suggesting a downside of 17.89% from the current price of $27.95. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the CarGurus Inc (CARG) Summary page.
CARG Key Business Developments
Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CarGurus Inc (CARG, Financial) reported a 14% year-over-year increase in full-year marketplace revenue, with growth accelerating throughout the year.
- The company achieved a 23% year-over-year increase in international revenue, with significant operating profit expansion.
- CarGurus Inc (CARG) saw strong OEM advertising business growth, returning to double-digit year-over-year expansion after several years of contraction.
- The company's platform has been rated the best ROI by dealers in the industry, capturing a larger share of dealer spend.
- CarGurus Inc (CARG) reported a 26% year-over-year increase in annual consolidated adjusted EBITDA, with margins expanding over 600 basis points to nearly 28%.
Negative Points
- The digital wholesale segment ended the year with an $18 million adjusted EBITDA loss, reflecting declines in transaction volume.
- Wholesale revenue was down 55% year over year, driven by a decline in dealer-to-dealer transaction volume.
- Product revenue decreased by 55% year over year, reflecting a reversion to normal conditions across origination channels.
- The company anticipates digital wholesale segment EBITDA losses to increase sequentially due to lower transaction volume.
- CarGurus Inc (CARG) faces tougher comps in 2025, with growth expected to taper down modestly as the year progresses.
