Revenue Downgrade: Here's What Analysts Forecast For CarGurus, Inc. (NASDAQ:CARG)

One thing we could say about the analysts on CarGurus, Inc. (NASDAQ:CARG) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the 13 analysts covering CarGurus are now predicting revenues of US$2.0b in 2023. If met, this would reflect a major 31% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$2.3b of revenue in 2023. It looks like forecasts have become a fair bit less optimistic on CarGurus, given the measurable cut to revenue estimates.

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Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 24% growth on an annualised basis. That is in line with its 28% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 11% per year. So although CarGurus is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for CarGurus next year. They're also forecasting more rapid revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on CarGurus after today.

Still got questions? We have estimates for CarGurus from its 13 analysts out until 2024, and you can see them free on our platform here.

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