Contrasting CarGurus (CARG) and Its Peers

CarGurus (NASDAQ:CARG) is one of 192 public companies in the “Interactive Media & Services” industry, but how does it compare to its peers? We will compare CarGurus to related companies based on the strength of its analyst recommendations, profitability, institutional ownership, dividends, earnings, risk and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for CarGurus and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CarGurus	0	5	8	1	2.71
CarGurus Competitors	1450	6039	11562	443	2.56

CarGurus currently has a consensus target price of $40.25, indicating a potential upside of 15.63%. As a group, “Interactive Media & Services” companies have a potential upside of 31.71%. Given CarGurus’ peers higher probable upside, analysts plainly believe CarGurus has less favorable growth aspects than its peers.

Institutional and Insider Ownership

86.9% of CarGurus shares are owned by institutional investors. Comparatively, 41.2% of shares of all “Interactive Media & Services” companies are owned by institutional investors. 18.2% of CarGurus shares are owned by company insiders. Comparatively, 24.0% of shares of all “Interactive Media & Services” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares CarGurus and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CarGurus	18.51%	68.43%	34.69%
CarGurus Competitors	-158.12%	-18.08%	4.01%

Earnings and Valuation

This table compares CarGurus and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
CarGurus	$906.98 million	$155.90 million	17.58
CarGurus Competitors	$13.12 billion	$3.48 billion	8.13

CarGurus’ peers have higher revenue and earnings than CarGurus. CarGurus is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

CarGurus has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, CarGurus’ peers have a beta of 1.88, suggesting that their average stock price is 88% more volatile than the S&P 500.

Summary

CarGurus beats its peers on 7 of the 13 factors compared.

CarGurus Company Profile

CarGurus, Inc. operates an online automotive marketplace that helps consumers research and compare vehicles and connect with dealerships. Its website and mobile apps feature new and used vehicle listings, search tools, vehicle information and pricing insights designed to help shoppers evaluate available cars. The company also provides dealerships with products and services to market inventory and engage with potential buyers through its platform. CarGurus was founded in 2006 by Langley Steinert, who previously co-founded TripAdvisor, and is headquartered in Cambridge, Massachusetts.