CarGurus, Inc. (CARG) stock analysis
Close on Nov 13, 2026Market cap $3.10BP/E 17.6Yield –
StockData Score
Prices as of Nov 13, 2026How the score works
Solid20 of 30 checks passed
CarGurus passes 20 of the 30 checks behind our score; 6 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.
- Valuation
- 5/6
- Growth
- 3/6
- Past performance
- 6/6
- Financial health
- 6/6
- Dividend
- 0/6
What stands out
Margin of safety over 20%
The price is 25.1% below fair value, more than the 20% cushion we look for.
Trading below fair value
The share price of $34.81 is below our fair value estimate of $46.47.
Return on equity over 15%
Return on equity was 54.2% over the last twelve months and averaged 16.2% over five years.
Return on capital over 10%
Return on invested capital was 111%, above the 10% that usually covers the cost of capital.
What to watch
Revenue growing under 10% a year
Revenue grew -18.2% a year over the last three fiscal years, short of the 10% we look for.
P/B above the industry
CarGurus's price-to-book of 10.23 is above the Computer Programming, Data Processing, and Other Computer Related Services median of 3.05.
Gross margin slipping
Gross margin was 92.1% over the last twelve months, against 93.0% a year earlier.
No dividend
CarGurus has not paid a dividend in the last twelve months.
Valuation5/6
P/E below its 5-year median
CarGurus's P/E of 17.6 is below its own 5-year median of 26.3.
P/E below the industry
CarGurus's P/E of 17.6 is below the Computer Programming, Data Processing, and Other Computer Related Services median of 27.3.
EV/EBITDA below its 5-year median
CarGurus's EV/EBITDA of 11.2 is below its 5-year median of 14.2.
P/B above the industry
CarGurus's price-to-book of 10.23 is above the Computer Programming, Data Processing, and Other Computer Related Services median of 3.05.
Trading below fair value
The share price of $34.81 is below our fair value estimate of $46.47.
Margin of safety over 20%
The price is 25.1% below fair value, more than the 20% cushion we look for.
Growth3/6
Revenue growing under 10% a year
Revenue grew -18.2% a year over the last three fiscal years, short of the 10% we look for.
EPS growing 10%+ a year
Diluted EPS grew 35.7% a year over the last three fiscal years.
Earnings growth accelerating
Net income grew 21.1% over the last twelve months, against a 5-year average of 15.0% a year.
Growing faster than the industry
Revenue grew 13.5% over the last twelve months; the Computer Programming, Data Processing, and Other Computer Related Services median is 9.6%.
Guidance issued
The latest outlook (Full-Year 2026 Total revenue, Nov 5, 2026) was issued for the first time, so it neither adds nor takes away points.
Gross margin slipping
Gross margin was 92.1% over the last twelve months, against 93.0% a year earlier.
Past performance6/6
Return on equity over 15%
Return on equity was 54.2% over the last twelve months and averaged 16.2% over five years.
Return on capital over 10%
Return on invested capital was 111%, above the 10% that usually covers the cost of capital.
Return on equity above the industry
CarGurus's return on equity of 54.2% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -1.1%.
Earnings grew over 5 years
Net income grew 15.0% a year on average over the last five fiscal years.
Net margin above its 5-year average
Net margin was 18.5% over the last twelve months, against a 5-year average of 8.3%.
Net margin above the industry
CarGurus's net margin of 18.5% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -4.7%.
Financial health6/6
No debt
CarGurus has no borrowings on its latest balance sheet.
Debt not rising
With no debt today, leverage cannot have risen.
Debt covered by cash flow
There is no debt to cover.
Interest well covered
No meaningful interest expense to cover.
Short-term assets cover short-term debts
Current assets are 2.29 times current liabilities.
Low bankruptcy risk
The Altman Z-score is 10.51; above 3 is the safe zone and below 1.8 the distress zone.
Dividend0/6
No dividend
CarGurus has not paid a dividend in the last twelve months.
Yield against Treasuries
No dividend.
Yield against the market
No dividend.
Dividend stability
No dividend.
Earnings cover
No dividend.
Cash-flow cover
No dividend.
Fair value
How we estimate itOur estimate per share
$46.47
The share price is 25% below this estimate.
| Method | Multiple used | Own 5Y median | Industry median | Value per share | Weight |
|---|---|---|---|---|---|
| P/E | 26.8× | 26.3× | 27.3× | $53.09 | 44% |
| EV/EBITDA | 16.2× | 14.2× | 18.2× | $49.68 | 39% |
| Earnings power | 10.9% cost of equity | – | – | $21.35 | 17% |
| Fair value | $46.47 | 100% | |||
Valuation over time
Using the earnings and balance sheet published at each date, not today's.
- P/E at month end
- Own 5-year median 26.3
- Computer Programming, Data Processing, and Other Computer Related Services median 27.3
An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.
Market risk
From the past year of daily prices.
Liquidity
Low risk
- Average value traded per day
- $47.50M
- Value traded per 1% price move
- $22.40M
Downside
High risk
- Typical loss in a bad month
- 26.5%
- Volatility (annualized)
- 41%
- Sharpe ratio, 1 year
- -0.17
- Beta to the S&P 500 (5Y)
- 1.15
Typical bad-month loss, week by week
Margins
Share of revenue, fiscal years 2014 to 2025
Gross margin
Operating margin
Net margin
Growth rates
Compound annual growth to fiscal 2025
| Per year | 1 year | 3 years | 5 years | 10 years | Five-year pace |
|---|---|---|---|---|---|
| Revenue | +13.7% | -18.2% | +10.5% | +24.8% | |
| Gross profit | +15.6% | +8.6% | +10.6% | +24.5% | |
| Operating income | +55.6% | +31.1% | +20.1% | – | |
| Net income | +643.4% | +22.7% | +15.0% | – | |
| EPS, diluted | +675.0% | +35.7% | +17.9% | – | |
| Free cash flow | +60.2% | +4.9% | +13.4% | +46.0% |
Returns and balance sheet
10 fiscal years. Hover a measure to see how it is calculated.
| Measure | FY2016 | FY2020 | FY2025 | Trend |
|---|---|---|---|---|
| Return on equity | -15.5% | 24.6% | 34.0% | |
| Return on assets | – | 17.3% | 21.0% | |
| Current ratio | 2.94 | 4.99 | 2.81 | |
| Interest coverage | 329.7× | – | – | |
| Inventory turnover | – | – | – | |
| Capex to revenue | 3.0% | 0.5% | 0.7% | |
| Diluted shares | 44M | 114M | 100M |
Where the cash went
Fiscal 2021 to 2025, five years combined
CarGurus generated $1.03B from operations and spent $840.82M on capital expenditure, dividends and share buybacks. 14% of that went back into the business.
DuPont analysis
Return on equity split into margin, efficiency and leverage
| Fiscal year | Net margin | Asset turnover | Equity multiplier | Return on equity |
|---|---|---|---|---|
| FY2025 | 17.2% | 1.22× | 1.62× | 34.0% |
| FY2024 | 2.6% | 0.92× | 1.50× | 3.6% |
| FY2023 | 5.3% | 0.76× | 1.37× | 5.5% |
| FY2022 | 5.1% | 1.78× | 1.49× | 13.5% |
| FY2021 | 11.5% | 1.33× | 1.61× | 24.5% |
| FY2020 | 14.1% | 1.23× | 1.42× | 24.6% |
| FY2019 | 7.2% | 1.78× | 1.47× | 18.7% |
| FY2018 | 14.4% | 2.04× | 1.39× | 40.6% |
| FY2017 | 4.2% | 2.29× | 4.69× | 44.7% |
Piotroski F-Score
Nine tests of profitability, balance sheet and efficiency, fiscal 2025 against fiscal 2024
- ProfitableNet income above zero$155.90M
- Cash generatingOperating cash flow above zero$295.28M
- Return on assets improvedROA up on the prior year2.3% → 18.9%
- Earnings backed by cashOperating cash flow above net income$295.28M vs $155.90M
- Less leverageLong-term debt to assets fell– → –
- Better liquidityCurrent ratio rose4.20 → 2.81
- No dilutionShare count did not rise106M → 100M
- Gross margin improvedGross margin up on the prior year91.19% → 92.78%
- More efficientAsset turnover rose0.87 → 1.10
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