Earnings Preview: CarGurus

CarGurus CARG is preparing to release its quarterly earnings on Thursday, 2024-11-07. Here's a brief overview of what investors should keep in mind before the announcement.

Analysts expect CarGurus to report an earnings per share (EPS) of $0.42.

Investors in CarGurus are eagerly awaiting the company's announcement, hoping for news of surpassing estimates and positive guidance for the next quarter.

It's worth noting for new investors that stock prices can be heavily influenced by future projections rather than just past performance.

Performance in Previous Earnings

Last quarter the company beat EPS by $0.08, which was followed by a 20.27% increase in the share price the next day.

Here's a look at CarGurus's past performance and the resulting price change:

CarGurus Share Price Analysis

Shares of CarGurus were trading at $31.75 as of November 05. Over the last 52-week period, shares are up 75.56%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Analyst Observations about CarGurus

Understanding market sentiments and expectations within the industry is crucial for investors. This analysis delves into the latest insights on CarGurus.

CarGurus has received a total of 11 ratings from analysts, with the consensus rating as Buy. With an average one-year price target of $31.32, the consensus suggests a potential 1.35% downside.

Analyzing Ratings Among Peers

The below comparison of the analyst ratings and average 1-year price targets of ZoomInfo Technologies, IAC and Yelp, three prominent players in the industry, gives insights for their relative performance expectations and market positioning.

• As per analysts' assessments, ZoomInfo Technologies is favoring an Neutral trajectory, with an average 1-year price target of $8.0, suggesting a potential 74.8% downside.
• The consensus outlook from analysts is an Buy trajectory for IAC, with an average 1-year price target of $85.0, indicating a potential 167.72% upside.
• The prevailing sentiment among analysts is an Neutral trajectory for Yelp, with an average 1-year price target of $34.33, implying a potential 8.13% upside.

Peers Comparative Analysis Summary

The peer analysis summary outlines pivotal metrics for ZoomInfo Technologies, IAC and Yelp, demonstrating their respective standings within the industry and offering valuable insights into their market positions and comparative performance.

Key Takeaway:

CarGurus ranks at the bottom for Revenue Growth and Gross Profit, indicating lower performance in these areas compared to its peers. However, it ranks at the top for Return on Equity, showcasing a stronger profitability relative to others. Overall, CarGurus' performance is mixed when compared to its peers in the analysis.

Get to Know CarGurus Better

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. 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 majority of revenue from the U.S. Marketplace.

Unraveling the Financial Story of CarGurus

Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.

Revenue Growth: CarGurus's revenue growth over a period of 3 months has faced challenges. As of 30 June, 2024, the company experienced a revenue decline of approximately -8.78%. This indicates a decrease in the company's top-line earnings. When compared to others in the Communication Services sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Net Margin: CarGurus's net margin is impressive, surpassing industry averages. With a net margin of -31.42%, the company demonstrates strong profitability and effective cost management.

Return on Equity (ROE): The company's ROE is below industry benchmarks, signaling potential difficulties in efficiently using equity capital. With an ROE of -13.47%, the company may need to address challenges in generating satisfactory returns for shareholders.

Return on Assets (ROA): CarGurus's ROA is below industry averages, indicating potential challenges in efficiently utilizing assets. With an ROA of -8.46%, the company may face hurdles in achieving optimal financial returns.

Debt Management: CarGurus's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.43.

To track all earnings releases for CarGurus visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.