CarGurus (NASDAQ:CARG) Announces Earnings Results, Beats Expectations By $0.04 EPS

CarGurus (NASDAQ:CARG) announced its quarterly earnings results on Thursday. The company reported $0.70 EPS for the quarter, topping the consensus estimate of $0.66 by $0.04, FiscalAI reports. CarGurus had a return on equity of 62.88% and a net margin of 18.06%. The business had revenue of $258.37 million for the quarter, compared to analyst estimates of $256.46 million. During the same quarter in the previous year, the company earned $0.57 EPS. The company’s quarterly revenue was up 8.2% on a year-over-year basis.

Here are the key takeaways from CarGurus’ conference call:

• Q3 revenue rose 12% year over year to $258 million, at the high end of guidance, while adjusted EBITDA increased 9% to $89.7 million. The 35% adjusted EBITDA margin was down 90 basis points year over year, and results included a $1.3 million real-estate-tax benefit.
• Dealer adoption beyond core listings continued to expand: U.S. paying dealers using at least one additional product grew about 16% year over year, and net U.S. dealer ads rose by 251 sequentially. CarGurus cited strong early adoption of VINMax and launched StockVantage to extend its inventory tools.
• Dealer margins and consumer affordability remain under pressure, with higher borrowing costs contributing to cautious spending. Q4 revenue guidance implies 7.2%–9.3% year-over-year growth, and full-year adjusted EBITDA margin is expected to decline 20–80 basis points.
• CarGurus said AI-related search has not materially cannibalized its traffic so far, while Guru usage rose 24% sequentially and Dealership Mode usage reached a record, up 105% from Q2. The company is positioning its proprietary data and shopping tools to reach consumers across newer AI interfaces.
• Free cash flow was $74 million in Q3, and the company ended the quarter with $165 million in cash. Its board authorized a new $250 million share-repurchase program, effective through December 2027.

CarGurus Stock Down 6.7%

Shares of NASDAQ:CARG traded down $2.41 during trading on Friday, hitting $33.74. 2,581,082 shares of the stock traded hands, compared to its average volume of 1,483,843. The company has a market cap of $3.01 billion, a price-to-earnings ratio of 17.04, a P/E/G ratio of 1.20 and a beta of 1.22. CarGurus has a 52-week low of $26.39 and a 52-week high of $41.22. The company has a fifty day moving average price of $32.17 and a two-hundred day moving average price of $32.85.

More CarGurus News

Here are the key news stories impacting CarGurus this week:

• Positive Sentiment: Third-quarter revenue increased 12% year over year to $258 million, slightly topping estimates, while adjusted EPS of $0.70 beat the $0.66 consensus. Adjusted EBITDA was $89.7 million, near the high end of the company’s guidance range. CarGurus Announces Third Quarter 2026 Results
• Positive Sentiment: The board authorized a $250 million share-repurchase program, which could support per-share results and signal confidence in the business. CarGurus Announces Third Quarter 2026 Results
• Positive Sentiment: Paying U.S. dealers using CarGurus products beyond listings grew 16% year over year, suggesting continued traction in additional dealer services. CarGurus: 3 Key Takeaways for Long-Term Investors
• Neutral Sentiment: Royal Bank of Canada lowered its price target from $42 to $41 but kept its “outperform” rating, retaining a favorable view while trimming its valuation outlook. Royal Bank of Canada recommendations
• Negative Sentiment: Despite the quarterly beats, CarGurus’ revenue guidance for the next quarter came in slightly below expectations. That softer outlook is the clearest potential explanation for the stock’s weakness. Q3 sales beat estimates but quarterly revenue guidance slightly misses expectations

Insider Buying and Selling at CarGurus

In other news, CMO Dafna Sarnoff sold 17,151 shares of the firm’s stock in a transaction on 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 sale, the chief marketing officer owned 109,668 shares in the company, valued at approximately $4,057,716. This trade represents a 13.52% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Matthew Quinn sold 3,824 shares of the firm’s stock in a transaction that occurred on Friday, October 2nd. The stock was sold at an average price of $29.62, for a total transaction of $113,266.88. Following the transaction, the chief technology officer directly owned 220,193 shares of the company’s stock, valued at approximately $6,522,116.66. This trade represents a 1.71% 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. Over the last 90 days, insiders sold 82,846 shares of company stock valued at $2,803,095. Corporate insiders own 18.19% of the company’s stock.

Analyst Ratings Changes

A number of analysts have recently issued reports on CARG shares. Citigroup lifted their price objective on shares of CarGurus from $32.00 to $39.00 and gave the company a “neutral” rating in a research note on Friday, August 14th. Weiss Ratings cut shares of CarGurus from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Friday, October 23rd. Royal Bank Of Canada decreased their target price on CarGurus from $42.00 to $41.00 and set an “outperform” rating on the stock in a report on Friday. Wall Street Zen upgraded shares of CarGurus from a “hold” rating to a “buy” rating in a research report on Saturday, October 31st. Finally, Oppenheimer boosted their price objective on CarGurus from $38.00 to $44.00 and gave the company an “outperform” rating in a research note on Wednesday, August 12th. One research analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating and six have issued a Hold rating to the company’s stock. According to MarketBeat.com, CarGurus presently has an average rating of “Moderate Buy” and a consensus price target of $39.85.

CarGurus Company Profile

CarGurus, Inc operates an online automotive marketplace that connects consumers with automobile dealers and private sellers. Its platform enables shoppers to search for new and used vehicles, compare listings, evaluate vehicle and dealer information, and contact sellers. CarGurus generates revenue primarily by providing dealers with digital listing, advertising and marketing products designed to help them reach potential buyers.

The company also offers tools intended to support automotive retailers’ online operations, including inventory merchandising, lead generation and digital retailing capabilities.