CarGurus (NASDAQ:CARG) Trading Down 8.9% - Here's What Happened

Key Points

• Shares down 8.9% to about $34.76 after Friday trading despite CarGurus reporting a Q1 EPS beat ($0.58 vs. $0.56) and adjusted EBITDA above the high end of guidance.
• Management repurchased $175M of stock in Q1 (repurchases since Dec 2022 represent ~29% of shares outstanding) and a director bought shares, signaling strong capital returns and insider confidence.
• GAAP net income fell ~23% YoY and Q2 guidance was only roughly in line with expectations, producing mixed analyst reactions—Needham raised its target to $43 while the consensus rating remains a "Hold" with an average target near $38.59.

CarGurus, Inc. (NASDAQ:CARG - Get Free Report)'s share price was down 8.9% during trading on Friday . The stock traded as low as $34.84 and last traded at $34.7570. Approximately 407,753 shares were traded during mid-day trading, a decline of 66% from the average daily volume of 1,202,807 shares. The stock had previously closed at $38.16.

Trending Headlines about CarGurus

Here are the key news stories impacting CarGurus this week:

• Positive Sentiment: Q1 results: EPS beat and adjusted profitability outperformed guidance — CarGurus reported $0.58 EPS vs. $0.56 consensus, and non‑GAAP adjusted EBITDA came in above the high end of guidance, supporting margin strength. GlobeNewsWire: Q1 Results
• Positive Sentiment: Large share repurchases: management repurchased $175M of stock in Q1 (repurchases since Dec 2022 represent ~29% of shares outstanding), which is a strong capital‑return signal that can support the share price. GlobeNewsWire: Buybacks
• Positive Sentiment: Analyst upgrade/target lift: Needham raised its price target from $37 to $43 and maintained a Buy rating, signaling analyst confidence in upside versus current levels. Benzinga / The Fly: Needham PT Raise
• Neutral Sentiment: Q2 guidance roughly in line: management set Q2 EPS of $0.570–$0.640 (consensus ~$0.580) and revenue guidance $247–252M vs. consensus ~$249M — guidance is generally consistent with expectations but leaves a wide band. MarketBeat: Guidance & Call
• Neutral Sentiment: Marketing/strategy initiatives: coverage highlights marketing pushes (NASCAR Canada partnership and Confidence Awards) that could help customer acquisition and brand awareness over time but are not immediate revenue levers. Yahoo Finance: NASCAR Canada Push
• Negative Sentiment: GAAP net income decline and mixed investor reaction: GAAP net income from continuing operations fell ~23% YoY, and despite the beat, the stock pulled back after the release as investors digested the decline and guidance nuance. GlobeNewsWire: GAAP Net Income
• Negative Sentiment: Market reaction & headlines: several outlets noted the stock dropped after results despite in‑line sales and the EPS beat, reflecting investor focus on near‑term guidance and GAAP metrics. MSN: Stock Drops

Wall Street Analyst Weigh In

Several equities analysts have commented on CARG shares. Oppenheimer cut their price target on CarGurus from $40.00 to $38.00 and set an "outperform" rating for the company in a report on Tuesday, February 24th. BTIG Research cut their price target on CarGurus from $44.00 to $37.00 and set a "buy" rating for the company in a report on Friday, February 20th. UBS Group reaffirmed a "neutral" rating and issued a $37.00 price target on shares of CarGurus in a report on Friday. Wall Street Zen cut CarGurus from a "buy" rating to a "hold" rating in a report on Sunday, February 15th. Finally, Needham & Company LLC upped their price target on CarGurus from $37.00 to $43.00 and gave the company a "buy" rating in a report on Friday. Five equities research analysts have rated the stock with a Buy rating and eight have given a Hold rating to the company's stock. According to data from MarketBeat.com, the company presently has an average rating of "Hold" and an average price target of $38.59.

CarGurus Trading Down 7.7%

The stock has a fifty day moving average price of $34.59 and a 200-day moving average price of $34.63. The firm has a market capitalization of $3.35 billion, a price-to-earnings ratio of 22.75, a PEG ratio of 1.40 and a beta of 1.28.

CarGurus (NASDAQ:CARG - Get Free Report) last released its quarterly earnings results on Thursday, May 7th. The company reported $0.58 EPS for the quarter, topping analysts' consensus estimates of $0.56 by $0.02. The business had revenue of $243.56 million for the quarter, compared to analyst estimates of $243.12 million. CarGurus had a return on equity of 47.50% and a net margin of 16.60%.CarGurus's revenue for the quarter was up 8.2% on a year-over-year basis. During the same period in the prior year, the company earned $0.46 EPS. CarGurus has set its Q2 2026 guidance at 0.570-0.640 EPS. On average, equities analysts expect that CarGurus, Inc. will post 2.06 EPS for the current year.

Insiders Place Their Bets

In other CarGurus news, Director Stephen Kaufer purchased 30,766 shares of the firm's stock in a transaction that occurred on Tuesday, March 3rd. The shares were acquired at an average cost of $32.50 per share, for a total transaction of $999,895.00. Following the transaction, the director directly owned 323,939 shares in the company, valued at approximately $10,528,017.50. The trade was a 10.49% increase in their ownership of the stock. The purchase was disclosed in a filing with the SEC, which is available through this link. Also, CTO Matthew Todd Quinn sold 4,341 shares of the stock in a transaction that occurred on Thursday, April 2nd. The stock was sold at an average price of $33.04, for a total value of $143,426.64. Following the sale, the chief technology officer owned 246,098 shares in the company, valued at approximately $8,131,077.92. This trade represents a 1.73% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 12,852 shares of company stock valued at $431,053 in the last 90 days. Insiders own 16.99% of the company's stock.

Institutional Investors Weigh In On CarGurus

A number of large investors have recently bought and sold shares of CARG. UBS Group AG grew its position in CarGurus by 158.2% during the 3rd quarter. UBS Group AG now owns 1,537,856 shares of the company's stock worth $57,254,000 after acquiring an additional 942,199 shares during the last quarter. Wellington Management Group LLP boosted its position in CarGurus by 6.6% in the 3rd quarter. Wellington Management Group LLP now owns 9,636,671 shares of the company's stock valued at $358,773,000 after buying an additional 594,670 shares during the last quarter. William Blair Investment Management LLC bought a new position in CarGurus in the 4th quarter valued at $21,756,000. Northwestern Mutual Wealth Management Co. boosted its position in CarGurus by 159,137.1% in the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 536,629 shares of the company's stock valued at $22,787,000 after buying an additional 536,292 shares during the last quarter. Finally, Prevatt Capital Ltd boosted its position in CarGurus by 28.1% in the 3rd quarter. Prevatt Capital Ltd now owns 2,050,000 shares of the company's stock valued at $76,322,000 after buying an additional 450,000 shares during the last quarter. 86.90% of the stock is currently owned by institutional investors.

About CarGurus

CarGurus, Inc operates an online automotive marketplace designed to connect buyers and sellers of new and used vehicles. Through its proprietary search engine and data-driven pricing tools, the platform enables consumers to compare listings, assess fair market values and locate local dealers offering competitive deals. CarGurus also provides detailed vehicle history reports, dealer reviews and financing options to streamline the car-shopping process for both private parties and franchised dealerships.

The company's core product offerings include Instant Market Value (IMV), which leverages pricing algorithms to help buyers identify over- or under-priced vehicles, as well as dealer subscription services that grant automotive retailers access to lead generation tools, targeted advertising and dynamic pricing insights.

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