📊 CARG Key Takeaways
Investment Thesis
CarGurus demonstrates exceptional financial health with industry-leading profitability metrics (92.8% gross margin, 27% operating margin, 17.2% net margin) and strong growth (13.7% revenue YoY) while maintaining a fortress balance sheet with zero debt and $190.5M cash. The company generates substantial free cash flow ($288.9M, 31.9% FCF margin) with minimal capital requirements, positioning it for sustainable shareholder returns and strategic flexibility.
CARG Strengths
- Exceptional profitability with 92.8% gross margin and 27% operating margin indicating strong pricing power and operational efficiency
- Fortress balance sheet: zero long-term debt, $190.5M cash, 2.81x current ratio, and 8429x interest coverage ratio
- Robust free cash flow generation of $288.9M (31.9% FCF margin) with minimal capex requirements ($6.4M) enabling reinvestment or returns
- Strong return on equity of 41.7% and ROA of 23.6% demonstrating efficient capital deployment
- Revenue growth of 13.7% YoY coupled with EPS growth of 675% indicates improving operational leverage and earnings quality
CARG Risks
- Revenue growth of 13.7% is moderate for a technology services company, suggesting potential market saturation or competitive pressures
- High insider trading activity (23 Form 4 filings in 90 days) warrants monitoring for potential insider concerns or executive compensation-driven selling
- Net income growth at 0% YoY despite 13.7% revenue growth indicates margin compression or one-time items requiring investigation
- Concentrated business model in automotive classified services sector creates exposure to economic cycles and industry disruption
Key Metrics to Watch
- Revenue growth trajectory and year-over-year acceleration/deceleration
- Operating margin sustainability and gross margin trends
- Free cash flow conversion and capital expenditure efficiency
- Debt-to-equity ratio and management's capital allocation priorities
- Return on equity trends and shareholder equity growth
CARG Financial Metrics
💡 AI Analyst Insight
The 31.9% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. Strong liquidity with a 2.81x current ratio provides a solid financial cushion.
CARG Profitability Ratios
CARG vs Technology Sector
How CarGurus, Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
CARG Balance Sheet & Liquidity
CARG 5-Year Financial Trend
5-Year Trend Summary: CarGurus, Inc.'s revenue has remained relatively flat over the 5-year period, with a 5% decline. The most recent EPS of $0.19 reflects profitable operations.
CARG Growth Metrics (YoY)
CARG Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $231.4M | $21.3M | $0.21 |
| Q2 2025 | $218.7M | $21.3M | $0.22 |
| Q1 2025 | $215.8M | $21.3M | $0.20 |
| Q3 2024 | $219.4M | $16.1M | $0.17 |
| Q2 2024 | $218.7M | $16.1M | $0.12 |
| Q1 2024 | $215.8M | $16.1M | $0.10 |
| Q3 2023 | $219.4M | $16.1M | $0.14 |
| Q2 2023 | $239.7M | $16.1M | $-0.09 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
CARG Capital Allocation
CARG SEC Filings
Access official SEC EDGAR filings for CarGurus, Inc. (CIK: 0001494259)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CARG
What is the AI rating for CARG?
CarGurus, Inc. (CARG) has an AI rating of STRONG BUY with 92% confidence, based on fundamental analysis of SEC EDGAR filings.
What are CARG's key strengths?
Exceptional profitability with 92.8% gross margin and 27% operating margin indicating strong pricing power and operational efficiency. Fortress balance sheet: zero long-term debt, $190.5M cash, 2.81x current ratio, and 8429x interest coverage ratio.
What are the risks of investing in CARG?
Revenue growth of 13.7% is moderate for a technology services company, suggesting potential market saturation or competitive pressures. High insider trading activity (23 Form 4 filings in 90 days) warrants monitoring for potential insider concerns or executive compensation-driven selling.
What is CARG's revenue and growth?
CarGurus, Inc. reported revenue of $907.0M.
Does CARG pay dividends?
CarGurus, Inc. does not currently pay dividends.
Where can I find CARG SEC filings?
Official SEC filings for CarGurus, Inc. (CIK: 0001494259) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CARG's EPS?
CarGurus, Inc. has a diluted EPS of $1.55.
How is the AI analysis conducted?
Our AI (Claude) analyzes publicly available SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports to evaluate financial health, profitability ratios, balance sheet strength, and growth metrics.