CarGurus (NASDAQ:CARG) Posts Quarterly Earnings Results, Beats Estimates By $0.04 EPS

CarGurus (NASDAQ:CARG) issued its quarterly earnings results on Thursday. The company reported $0.70 earnings per share for the quarter, topping the consensus estimate of $0.66 by $0.04, FiscalAI reports. CarGurus had a net margin of 18.06% and a return on equity of 62.88%. The company had revenue of $258.37 million during the quarter, compared to analysts’ expectations of $256.46 million. During the same period last year, the business earned $0.57 EPS. The business’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 CARG stock traded down $2.41 on Friday, reaching $33.74. The stock had a trading volume of 2,581,082 shares, compared to its average volume of 1,483,843. The firm’s 50-day moving average is $32.17 and its two-hundred day moving average is $32.85. The firm has a market capitalization 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 12 month low of $26.39 and a 12 month high of $41.22.

Insider Buying and Selling at CarGurus

In other news, COO Samuel Zales sold 10,000 shares of the firm’s stock in a transaction that occurred on Monday, November 2nd. The stock was sold at an average price of $32.33, for a total value of $323,300.00. Following the completion of the sale, the chief operating officer directly owned 419,735 shares of the company’s stock, valued at $13,570,032.55. This trade represents a 2.33% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CMO Dafna Sarnoff sold 17,151 shares of CarGurus stock in a transaction that occurred on Thursday, August 13th. The stock was sold at an average price of $37.00, for a total value of $634,587.00. Following the transaction, the chief marketing officer owned 109,668 shares of the company’s stock, valued at $4,057,716. This represents a 13.52% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 82,846 shares of company stock valued at $2,803,095 in the last three months. Corporate insiders own 18.19% of the company’s stock.

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

Analysts Set New Price Targets

A number of research firms recently weighed in on CARG. Barclays decreased their target price on shares of CarGurus from $41.00 to $38.00 and set an “overweight” rating for the company in a research report on Tuesday, October 6th. BTIG Research lifted their price target on shares of CarGurus from $40.00 to $41.00 and gave the company a “buy” rating in a research note on Friday, August 7th. Wall Street Zen raised shares of CarGurus from a “hold” rating to a “buy” rating in a research report on Saturday, October 31st. Needham & Company LLC increased their price objective on shares of CarGurus from $43.00 to $44.00 and gave the stock a “buy” rating in a research note on Friday, August 7th. Finally, Citigroup raised their price objective on CarGurus from $32.00 to $39.00 and gave the company a “neutral” rating in a report on Friday, August 14th. One equities research analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating and six have assigned a Hold rating to the company. Based on data from MarketBeat.com, CarGurus has a consensus rating of “Moderate Buy” and an average target price of $39.85.

About CarGurus

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.