CarGurus, Inc. (CARG)
Consumer Cyclical · NMS · US
Fundamentals
Valuation and ratings
CarGurus, Inc. trades at USD36.02, which is 53% above the USD16.91 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 79 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 17.9 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About CarGurus, Inc.
CarGurus, Inc. operates an online automotive platform for buying and selling vehicles in the United States and internationally. The company offers dealer subscription fees, advertising from auto manufacturers and other brand advertisers, and partnerships with financing services companies. It provides an online automotive marketplace that connects large audience of car shoppers with extensive network of dealers, anchoring integrated suite of products. It also offers Digital Deal which allows consumers the option to start their vehicle purchase process online for eligible listings; Dealership Mode which provides consumers with on-the-lot support during visits to participating dealers through the CarGurus app; Sell My Car Top Dealer Offers which allows dealers to make tailored trade-in offers; and IMV Scan enables dealers to scan a VIN using their smartphone to access IMV data; and PriceVantage, an advanced pricing software powered by machine learning that leverages real-time consumer demand. In addition, the company provides auto manufacturers and others advertiser products, such as brand reinforcement, category sponsorship, automobile segment exclusivity, and consumer segment exposure; Autolist, an online automotive marketplace through mobile applications and a website; and PistonHeads which is an automotive marketplace, auction platform, and editorial site for automotive enthusiasts. The company was formerly known as CarGurus LLC and changed its name to CarGurus, Inc. in June 2015. CarGurus, Inc. was founded in 2005 and is headquartered in Boston, Massachusetts.
CARG passes 2 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
13 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Connor Haley, ALTA FOX CAPITAL MANAGEMENT, LLC$54.05M · 14.3% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$50.31M · 0.0% of book
- Select Equity Group, Select Equity Group, L.P.$15.64M · 0.1% of book
- Renaissance Technologies, RENAISSANCE TECHNOLOGIES LLC$11.70M · 0.0% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$5.04M · 0.0% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is CarGurus, Inc. (CARG) undervalued?
Against our discounted cash flow estimate of USD16.91, CARG at USD36.02 is 53% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own CARG?
13 of the institutions we track reported a position in CARG in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is CARG's P/E ratio?
CARG trades at 17.9 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for CARG, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.