NasdaqGS:CARG

Stock Analysis Report

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Executive Summary

CarGurus, Inc. operates an online automotive marketplace connecting buyers and sellers of new and used cars in the United States, Canada, the United Kingdom, Germany, Italy, and Spain.

Rewards

Trading at 15.7% below our estimate of its fair value

Earnings are forecast to grow 34.28% per year

Risk Analysis

No risks detected for CARG from our risk checks.


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has CarGurus's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CARG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-6.3%

CARG

1.5%

US Interactive Media and Services

0.7%

US Market


1 Year Return

-10.0%

CARG

33.0%

US Interactive Media and Services

20.1%

US Market

Return vs Industry: CARG underperformed the US Interactive Media and Services industry which returned 33% over the past year.

Return vs Market: CARG underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

CARGIndustryMarket
7 Day-6.3%1.5%0.7%
30 Day11.6%2.9%6.4%
90 Day22.0%17.3%20.1%
1 Year-10.0%-10.0%33.1%33.0%22.6%20.1%
3 Yearn/a47.8%47.6%45.1%35.7%
5 Yearn/a122.6%122.1%79.7%60.3%

Price Volatility Vs. Market

How volatile is CarGurus's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is CarGurus undervalued compared to its fair value and its price relative to the market?

15.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CARG ($28.09) is trading below our estimate of fair value ($33.34)

Significantly Below Fair Value: CARG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CARG is poor value based on its PE Ratio (72.6x) compared to the US Interactive Media and Services industry average (32.9x).

PE vs Market: CARG is poor value based on its PE Ratio (72.6x) compared to the US market (19.2x).


Price to Earnings Growth Ratio

PEG Ratio: CARG is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: CARG is overvalued based on its PB Ratio (10.7x) compared to the US Interactive Media and Services industry average (2.2x).


Next Steps

Future Growth

How is CarGurus forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

34.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CARG's forecast earnings growth (34.3% per year) is above the savings rate (2.2%).

Earnings vs Market: CARG's earnings (34.3% per year) are forecast to grow faster than the US market (24.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CARG's revenue (12.6% per year) is forecast to grow faster than the US market (9.5% per year).

High Growth Revenue: CARG's revenue (12.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if CARG's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has CarGurus performed over the past 5 years?

60.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CARG has high quality earnings.

Growing Profit Margin: CARG's current net profit margins (7.7%) are lower than last year (8.5%).


Past Earnings Growth Analysis

Earnings Trend: CARG's earnings have grown significantly by 60.5% per year over the past 5 years.

Accelerating Growth: CARG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CARG had negative earnings growth (-3.3%) over the past year, making it difficult to compare to the Interactive Media and Services industry average (-22.8%).


Return on Equity

High ROE: CARG's Return on Equity (14.7%) is considered low.


Next Steps

Financial Health

How is CarGurus's financial position?


Financial Position Analysis

Short Term Liabilities: CARG's short term assets ($216.1M) exceed its short term liabilities ($43.1M).

Long Term Liabilities: CARG's short term assets ($216.1M) exceed its long term liabilities ($68.4M).


Debt to Equity History and Analysis

Debt Level: CARG is debt free.

Reducing Debt: CARG has not had any debt for past 5 years.

Debt Coverage: CARG has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: CARG has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is CarGurus's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate CARG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CARG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CARG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CARG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CARG's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.6yrs

Average management tenure


CEO

E. Steinert (56 yo)

14.58yrs

Tenure

US$2,680,111

Compensation

Mr. E. Langley Steinert founded Cargurus Inc. in 2006 and has been its Chief Executive Officer since 2006 and served as its President since June 2015 until February 2019. Mr. Steinert is a Venture Partner ...


CEO Compensation Analysis

Compensation vs Market: E.'s total compensation ($USD2.68M) is below average for companies of similar size in the US market ($USD5.74M).

Compensation vs Earnings: E.'s compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
E. Steinert
Founder14.58yrsUS$2.68m18.34%
$ 580.5m
Samuel Zales
COO & President1.5yrsUS$6.11m0.035%
$ 1.1m
Jason Trevisan
CFO, President of International & Treasurer4.92yrsUS$5.89m0.16%
$ 5.0m
Kyle Lomeli
Chief Technology Officer1.58yrsUS$5.98m0.056%
$ 1.8m
Sarah Welch
Chief Marketing Officer1.58yrsUS$4.21m0.076%
$ 2.4m
Rodney Nelson
Director of Investor Relationsno datano datano data
Kathleen Patton
General Counsel & Secretary3yrsUS$1.10m0.011%
$ 333.7k
Carol Chen
Vice President of Sales Operations0.58yrno datano data
Kristen Kenny
VP of People & Talent4.5yrsno datano data
Andrea Eldridge
Chief People Officer0.50yrno datano data
Thomas Caputo
Chief Product Officer1.58yrsUS$1.52m0.053%
$ 1.7m
Scot Fredo
Senior Vice President of Financial Planning & Analysis1.58yrsno datano data

1.6yrs

Average Tenure

47yo

Average Age

Experienced Management: CARG's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
E. Steinert
Founder14.58yrsUS$2.68m18.34%
$ 580.5m
Stephen Kaufer
Independent Non-Employee Director13.17yrsUS$189.99k0.22%
$ 7.1m
Lori Hickok
Independent Director2yrsUS$204.99k0.0063%
$ 199.1k
Greg Schwartz
Independent Director2.42yrsUS$193.99k0.0035%
$ 111.1k
Steven Conine
Independent Director2.17yrsUS$189.99k0.012%
$ 371.0k
Anastasios Parafestas
Independent Non-Employee Director14.42yrsUS$193.99k0.27%
$ 8.5m
Ian Smith
Non-Employee Director13.17yrsUS$196.99k0.067%
$ 2.1m

2.9yrs

Average Tenure

56yo

Average Age

Experienced Board: CARG's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

CarGurus, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: CarGurus, Inc.
  • Ticker: CARG
  • Exchange: NasdaqGS
  • Founded: 2005
  • Industry: Interactive Media and Services
  • Sector: Media
  • Market Cap: US$3.166b
  • Shares outstanding: 112.98m
  • Website: https://www.cargurus.com

Number of Employees


Location

  • CarGurus, Inc.
  • 2 Canal Park
  • 4th Floor
  • Cambridge
  • Massachusetts
  • 2141
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CARGNasdaqGS (Nasdaq Global Select)YesClass A common stockUSUSDOct 2017
0C6DB (Deutsche Boerse AG)YesClass A common stockDEEUROct 2017

Biography

CarGurus, Inc. operates an online automotive marketplace connecting buyers and sellers of new and used cars in the United States, Canada, the United Kingdom, Germany, Italy, and Spain. The company provides ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/14 01:17
End of Day Share Price2020/08/13 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.