Gross Margin % is calculated as gross profit divided by its revenue. CarGurus's Gross Profit for the
three
months ended in Dec. 2024 was $199.0 Mil. CarGurus's Revenue for the
three
months ended in Dec. 2024 was $228.5 Mil. Therefore, CarGurus's Gross Margin % for the quarter that ended in Dec. 2024 was 87.07%.
Warning Sign:
CarGurus Inc gross margin has been in long-term decline. The average rate of decline per year is -5.5%.
The historical rank and industry rank for CarGurus's Gross Margin % or its related term are showing as below:
CARG'
s Gross Margin % Range Over the Past 10 Years
Min: 39.73 Med: 93.05 Max: 95.71
Current: 82.62
During the past 10 years, the highestGross Margin % of CarGurus was 95.71%. The lowest was 39.73%. And the median was 93.05%.
CARG's Gross Margin % is ranked better than 99.06% of 1280
companies
in the Vehicles & Parts industry
Industry Median: 19.99
vs CARG: 82.62
CarGurus had a gross margin of 87.07% for the quarter that ended in Dec. 2024 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for CarGurus was -5.50% per year.
CarGurus Gross Margin % Historical Data
The historical data trend for CarGurus's Gross Margin % 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.
Competitive Comparison of CarGurus's Gross Margin %
For the Auto & Truck Dealerships subindustry, CarGurus's Gross Margin %, along with its competitors' market caps and Gross Margin % 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's Gross Margin % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, CarGurus's Gross Margin % distribution charts can be found below:
* The bar in red indicates where CarGurus's Gross Margin % falls into.
* 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.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
CarGurus (NAS:CARG) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
CarGurus had a gross margin of 87.07% for the quarter that ended in Dec. 2024 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
CarGurus Gross Margin % Related Terms
Thank you for viewing the detailed overview of CarGurus's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
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 Listings, through which it offers real-time and historical data analyzing the connections and pricing analysis. 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 segments, namely U.S. Marketplace and Digital Wholesale. It generates maximum revenue from the U.S. Marketplace segment. Geographically, the company derives its key revenue from the United States and the rest from international markets.
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