CarGurus (NASDAQ:CARG) Stock Falls 7% - Time to Sell?

Key Points

• CarGurus shares fell 7% to approximately $28.99, trading below their 50-day and 200-day moving averages, despite relatively light volume.
• Analysts remain broadly positive, with a consensus “Moderate Buy” rating and an average price target of $40.75, implying substantial upside from the trading price.
• The company recently beat quarterly earnings and revenue expectations, posting $0.66 EPS and 7.2% year-over-year revenue growth; however, insiders have sold shares while institutional investors own 86.9% of the stock.

CarGurus, Inc. (NASDAQ:CARG - Get Free Report)'s stock price was down 7% during trading on Thursday. The company traded as low as $29.29 and last traded at $28.9880. 525,971 shares were traded during mid-day trading, a decline of 57% from the average session volume of 1,232,689 shares. The stock had previously closed at $31.16.

Analyst Ratings Changes

Several analysts have recently weighed in on CARG shares. Royal Bank Of Canada raised their price objective on shares of CarGurus from $35.00 to $42.00 and gave the stock an "outperform" rating in a report on Friday, August 7th. UBS Group boosted their target price on CarGurus from $37.00 to $40.00 and gave the stock a "neutral" rating in a report on Friday, August 7th. BTIG Research increased their price target on CarGurus from $40.00 to $41.00 and gave the stock a "buy" rating in a research report on Friday, August 7th. Barclays raised their price target on CarGurus from $40.00 to $41.00 and gave the company an "overweight" rating in a report on Monday, August 10th. Finally, Wall Street Zen upgraded CarGurus from a "hold" rating to a "buy" rating in a research report on Saturday, August 22nd. One equities research analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and seven have assigned a Hold rating to the company. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $40.75.

CarGurus Stock Down 6.3%

The stock's 50-day moving average price is $34.94 and its 200-day moving average price is $33.63. The company has a market capitalization of $2.60 billion, a price-to-earnings ratio of 15.92, a price-to-earnings-growth ratio of 1.11 and a beta of 1.16.

CarGurus (NASDAQ:CARG - Get Free Report) last issued its quarterly earnings results on Thursday, August 6th. The company reported $0.66 earnings per share for the quarter, beating analysts' consensus estimates of $0.61 by $0.05. CarGurus had a net margin of 18.06% and a return on equity of 62.88%. The business had revenue of $250.97 million during the quarter, compared to analyst estimates of $249.85 million. During the same quarter last year, the business posted $0.57 earnings per share. CarGurus's revenue for the quarter was up 7.2% compared to the same quarter last year. CarGurus has set its Q3 2026 guidance at 0.630-0.690 EPS. On average, equities research analysts anticipate that CarGurus, Inc. will post 2.17 EPS for the current year.

Insider Activity at CarGurus

In other news, COO Samuel Zales sold 10,000 shares of the company's stock in a transaction on Tuesday, September 15th. The stock was sold at an average price of $34.62, for a total transaction of $346,200.00. Following the transaction, the chief operating officer owned 455,349 shares of the company's stock, valued at $15,764,182.38. This represents a 2.15% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CMO Dafna Sarnoff sold 17,151 shares of the firm's stock in a transaction dated Thursday, August 13th. The shares were sold at an average price of $37.00, for a total value of $634,587.00. Following the completion of the transaction, the chief marketing officer owned 109,668 shares in the company, valued at approximately $4,057,716. This represents a 13.52% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 54,456 shares of company stock valued at $1,981,734 over the last quarter. 18.19% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of CARG. Tidal Investments LLC raised its stake in shares of CarGurus by 16.0% during the second quarter. Tidal Investments LLC now owns 61,437 shares of the company's stock worth $2,094,000 after buying an additional 8,468 shares during the last quarter. RFG Advisory LLC bought a new position in CarGurus in the second quarter valued at approximately $1,421,000. Squarepoint Ops LLC acquired a new stake in CarGurus during the 2nd quarter worth $288,000. Nykredit A S acquired a new stake in CarGurus during the 2nd quarter worth $183,000. Finally, Corient Private Wealth LP grew its holdings in CarGurus by 657.4% during the 2nd quarter. Corient Private Wealth LP now owns 183,666 shares of the company's stock worth $6,261,000 after acquiring an additional 159,416 shares during the period. Institutional investors own 86.90% of the company's stock.

About CarGurus

CarGurus, Inc is a digital automotive marketplace that connects consumers with dealerships and private sellers offering new and used vehicles. Its platform enables shoppers to search vehicle listings, compare prices and features, review dealership information, and evaluate vehicle deals using data-driven tools. CarGurus generates revenue primarily by providing automotive dealers with listing, advertising, and other digital marketing services.

The company also offers products designed to help dealers attract shoppers, manage vehicle listings, and support the online and in-person vehicle-buying process.

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