CarGurus (NASDAQ:CARG) Issues Quarterly Earnings Results, Beats Expectations By $0.05 EPS

CarGurus (NASDAQ:CARG) announced its earnings results on Thursday. The company reported $0.66 earnings per share for the quarter, topping analysts’ consensus estimates of $0.61 by $0.05, FiscalAI reports. The firm had revenue of $250.97 million during the quarter, compared to analyst estimates of $249.85 million. CarGurus had a net margin of 18.06% and a return on equity of 59.79%. The company’s revenue for the quarter was up 7.2% compared to the same quarter last year. During the same period in the prior year, the business earned $0.57 EPS. CarGurus updated its Q3 2026 guidance to 0.630-0.690 EPS.

Here are the key takeaways from CarGurus’ conference call:

• Second-quarter results exceeded expectations: Revenue grew 13% year over year to $251 million, adjusted EBITDA rose 7% to $85 million, and free cash flow reached $88 million, representing 103% conversion of adjusted EBITDA.
• Dealers remained cautious about incremental spending amid margin pressure, lower days on lot, cost-cutting efforts, and FTC-mandated all-in pricing transparency. CarGurus reiterated its 2026 revenue growth outlook but expects a more measured pace of dealer decision-making in the third quarter.
• AI-driven products are increasing engagement and expanding CarGurus beyond its marketplace. Dealer platform sessions rose 28% year over year, PriceVantage bookings increased more than 50% sequentially, and Guru-driven U.S. leads rose 60% sequentially.
• Greater AI-enabled productivity and operating discipline led the company to raise its full-year profitability outlook, with adjusted EBITDA margin now expected to compress only 50–150 basis points versus 2025. CarGurus also repurchased $29 million of shares in the quarter and has $46 million remaining under its 2026 authorization.

CarGurus Trading Up 7.2%

Shares of CarGurus stock traded up $2.61 on Friday, reaching $38.99. 2,180,161 shares of the company were exchanged, compared to its average volume of 1,018,019. CarGurus has a one year low of $26.39 and a one year high of $41.22. The company has a market capitalization of $3.52 billion, a price-to-earnings ratio of 21.19, a PEG ratio of 1.33 and a beta of 1.17. The company has a 50-day moving average of $32.85 and a 200 day moving average of $32.65.

Key CarGurus News

Here are the key news stories impacting CarGurus this week:

• Positive Sentiment: Q2 earnings beat expectations: CarGurus reported adjusted earnings of $0.66 per share, up from $0.57 a year earlier and above analysts’ estimates of approximately $0.61–$0.62. Revenue reached $251.0 million, slightly exceeding consensus expectations and increasing 13% year over year. CarGurus Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: Strong profitability and cash generation: Second-quarter GAAP net income from continuing operations was $49.2 million. Adjusted EBITDA was $84.7 million, near the high end of company guidance, while operating cash flow was $94.6 million and free cash flow was $87.7 million. CarGurus Announces Second Quarter 2026 Results
• Positive Sentiment: Above-consensus Q3 outlook: CarGurus guided for third-quarter EPS of $0.63–$0.69, ahead of the $0.61 analyst consensus. Revenue guidance of $253.5 million–$258.5 million was broadly consistent with expectations, suggesting continued year-over-year growth. CarGurus Earnings Report
• Positive Sentiment: Share repurchases support per-share value: The company repurchased $29.2 million of stock during Q2. Since December 2022, cumulative repurchases have exceeded 30% of shares outstanding, which can support EPS and shareholder returns. CarGurus Q2 Results Presentation
• Neutral Sentiment: Revenue was only modestly above estimates, and the available report does not provide a clear updated full-year 2026 EPS target. Investors may therefore focus on future growth trends and the company’s ability to sustain its strong margins and cash flow.

Wall Street Analyst Weigh In

Several research firms have recently weighed in on CARG. Freedom Capital raised CarGurus to a “strong-buy” rating in a research report on Friday, June 12th. Wall Street Zen raised CarGurus from a “hold” rating to a “buy” rating in a research report on Saturday, June 27th. Royal Bank Of Canada lifted their price objective on shares of CarGurus from $35.00 to $42.00 and gave the company an “outperform” rating in a report on Friday. Piper Sandler reissued a “sector weight” rating on shares of CarGurus in a research report on Friday, June 12th. Finally, Barclays increased their target price on shares of CarGurus from $35.00 to $40.00 and gave the stock an “overweight” rating in a report on Tuesday, July 21st. One equities research analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating and six have issued a Hold rating to the stock. Based on data from MarketBeat.com, CarGurus presently has a consensus rating of “Moderate Buy” and a consensus target price of $40.25.

Insider Activity at CarGurus

In other news, CTO Matthew Todd Quinn sold 3,824 shares of the business’s stock in a transaction dated Thursday, July 2nd. The shares were sold at an average price of $35.03, for a total transaction of $133,954.72. Following the transaction, the chief technology officer directly owned 233,146 shares in the company, valued at $8,167,104.38. The trade was a 1.61% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, General Counsel Javier Zamora sold 8,072 shares of the company’s stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $29.53, for a total transaction of $238,366.16. Following the completion of the sale, the general counsel directly owned 103,061 shares in the company, valued at approximately $3,043,391.33. The trade was a 7.26% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders sold 31,764 shares of company stock valued at $1,071,649. 18.19% of the stock is owned by corporate insiders.

Institutional Trading of CarGurus

Several institutional investors and hedge funds have recently bought and sold shares of the business. Invesco Ltd. boosted its stake in shares of CarGurus by 1.5% during the 4th quarter. Invesco Ltd. now owns 1,702,402 shares of the company’s stock worth $65,287,000 after acquiring an additional 24,788 shares during the period. Mercer Global Advisors Inc. ADV lifted its holdings in CarGurus by 35.4% during the 4th quarter. Mercer Global Advisors Inc. ADV now owns 12,936 shares of the company’s stock valued at $496,000 after purchasing an additional 3,385 shares during the last quarter. Vident Advisory LLC lifted its holdings in CarGurus by 1.4% during the 4th quarter. Vident Advisory LLC now owns 155,205 shares of the company’s stock valued at $5,952,000 after purchasing an additional 2,207 shares during the last quarter. XTX Topco Ltd bought a new position in CarGurus during the fourth quarter worth $900,000. Finally, Kensington Investment Counsel LLC bought a new position in CarGurus during the fourth quarter worth $1,182,000. Institutional investors own 86.90% of the company’s stock.

CarGurus Company Profile

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.