>
Switch to:

CarGurus ROIC %

: 24.94% (As of Jun. 2021)
View and export this data going back to 2017. Start your Free Trial

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. CarGurus's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2021 was 24.94%.

As of today (2021-10-28), CarGurus's WACC % is 12.93%. CarGurus's ROIC % is 34.71% (calculated using TTM income statement data). CarGurus generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


CarGurus ROIC % Historical Data

The historical data trend for CarGurus's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

CarGurus Annual Data
Trend Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
ROIC %
Premium Member Only 41.94 57.96 101.32 25.40 37.92

CarGurus Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
ROIC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 12.50 61.11 49.12 24.41 24.94

Competitive Comparison

For the Internet Content & Information subindustry, CarGurus's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

CarGurus ROIC % Distribution

For the Interactive Media industry and Communication Services sector, CarGurus's ROIC % distribution charts can be found below:

* The bar in red indicates where CarGurus's ROIC % falls into.



CarGurus ROIC % Calculation

CarGurus's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2020 is calculated as:

ROIC % (A: Dec. 2020 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2019 ) + Invested Capital (A: Dec. 2020 ))/ count )
=97.756 * ( 1 - 21.75% )/( (202.071 + 201.389)/ 2 )
=76.49407/201.73
=37.92 %

where

Invested Capital(A: Dec. 2019 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=393.623 - 46.356 - ( 171.612 - max(0, 73.758 - 218.954+171.612))
=202.071

Invested Capital(A: Dec. 2020 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=502.298 - 35.469 - ( 290.299 - max(0, 66.536 - 331.976+290.299))
=201.389

CarGurus's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2021 is calculated as:

ROIC % (Q: Jun. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2021 ) + Invested Capital (Q: Jun. 2021 ))/ count )
=153.908 * ( 1 - 28.91% )/( (433.919 + 443.655)/ 2 )
=109.4131972/438.787
=24.94 %

where

Invested Capital(Q: Mar. 2021 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=719.393 - 55.423 - ( 240.668 - max(0, 81.725 - 311.776+240.668))
=433.919

Invested Capital(Q: Jun. 2021 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=784.205 - 70.908 - ( 269.642 - max(0, 103.547 - 388.776+269.642))
=443.655

Note: The Operating Income data used here is four times the quarterly (Jun. 2021) data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


CarGurus  (NAS:CARG) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, CarGurus's WACC % is 12.93%. CarGurus's ROIC % is 34.71% (calculated using TTM income statement data). CarGurus generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases. CarGurus earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.


CarGurus ROIC % Related Terms

Thank you for viewing the detailed overview of CarGurus's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


CarGurus Business Description

CarGurus logo
Industry
Traded in Other Exchanges
Address
2 Canal Park, 4th Floor, Cambridge, MA, USA, 02141
CarGurus Inc is a company that acts as an online automotive marketplace connecting buyers and sellers of new and used cars. The company provides three types of marketplace Listing products, Restricted Listings, and Enhanced or Featured Listing through which it offers real-time and historical data analyzing the connections and pricing analysis. It also provides all dealers with a web widget to place Deal Rating Badges, which show deal rating. The listing platforms offer auto manufacturers and others to buy advertising on the company's site and target consumers based on the make, model, and zip code of the cars. The company operates through two geographical segments namely United States and International. Most of the company's revenue comes from the United States.
Executives
Steinert Langley director, 10 percent owner, officer: CEO and Chairman C/O CARGURUS, INC. 2 CANAL PARK, 4TH FLOOR CAMBRIDGE MA 02141
Caputo Thomas Michael officer: Chief Product Officer C/O CARGURUS, INC. 2 CANAL PARK, 4TH FL. CAMBRIDGE MA 02141
Eldridge Andrea Lee officer: Chief People Officer 50 PEMBERTON STREET CAMBRIDGE MA 02140
Patton Kathleen Bender officer: General Counsel and Secretary 2 CANAL PARK 4TH FLOOR CAMBRIDGE MA 02141
Welch Sarah Amory officer: Chief Marketing Officer C/O CARGURUS, INC. 2 CANAL PARK, 4TH FL. CAMBRIDGE MA 02141
Zales Samuel officer: COO and President C/O CARGURUS, INC. 2 CANAL PARK, 4TH FL. CAMBRIDGE MA 02141
Lomeli Kyle officer: Chief Technology Officer 120 SYCAMORE STREET BELMONT MA 02478
Schwartz Greg M director C/O ZILLOW GROUP, INC. 1301 SECOND AVENUE, FLOOR 31 SEATTLE WA 98101
Smith Ian G director C/O CARGURUS, INC. 2 CANAL PARK, 4TH FLOOR CAMBRIDGE MA 02141
Parafestas Anastasios director C/O THE BOLLARD GROUP LLC ONE JOY STREET BOSTON MA 02108
Conine Steven director C/O WAYFAIR INC. 4 COPLEY PLACE BOSTON MA 02116
Hickok Lori A director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: HICKOK LORI A a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Kaufer Stephen director C/O TRIPADVISOR, INC. 141 NEEDHAM STREET NEWTON MA 02464
Chrzan Oliver Ian officer: Chief Technology Officer 86 WASHINGTON ST. NEWTON MA 02458
Argonaut 22 Llc 10 percent owner 1 JOY STREET BOSTON MA 02108

CarGurus Headlines

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)