CarGurus (NASDAQ:CARG – Get Free Report) issued its quarterly earnings data on Thursday. The company reported $0.70 EPS for the quarter, topping analysts’ consensus estimates of $0.66 by $0.04, FiscalAI reports. The firm had revenue of $258.37 million for the quarter, compared to analyst estimates of $256.46 million. CarGurus had a net margin of 18.06% and a return on equity of 62.88%. The company’s revenue was up 8.2% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.57 EPS.
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%
NASDAQ CARG traded down $2.41 during trading hours on Friday, hitting $33.74. The company’s stock had a trading volume of 2,581,082 shares, compared to its average volume of 1,483,843. The stock has a fifty day moving average of $32.17 and a 200 day moving average of $32.85. CarGurus has a twelve month low of $26.39 and a twelve month high of $41.22. The firm has a market capitalization of $3.01 billion, a P/E ratio of 16.40, a PEG ratio of 1.20 and a beta of 1.22.
Insider Activity
In other news, CTO Matthew Quinn sold 3,824 shares of the stock in a transaction on Friday, October 2nd. The stock was sold at an average price of $29.62, for a total value of $113,266.88. Following the transaction, the chief technology officer owned 220,193 shares of the company’s stock, valued at $6,522,116.66. This represents a 1.71% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Greg Schwartz sold 10,000 shares of the firm’s stock in a transaction on Wednesday, August 12th. The stock was sold at an average price of $36.07, for a total value of $360,700.00. Following the completion of the transaction, the director owned 8,716 shares in the company, valued at $314,386.12. This represents a 53.43% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders have sold 82,846 shares of company stock worth $2,803,095. 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
Wall Street Analysts Forecast Growth
Several research firms have recently commented on CARG. Needham & Company LLC increased their price target on shares of CarGurus from $43.00 to $44.00 and gave the company a “buy” rating in a research note on Friday, August 7th. Barclays dropped their price objective 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. B. Riley Financial reaffirmed a “buy” rating on shares of CarGurus in a report on Friday, August 7th. BTIG Research increased their price objective on CarGurus from $40.00 to $41.00 and gave the company a “buy” rating in a research report on Friday, August 7th. Finally, Wall Street Zen raised CarGurus from a “hold” rating to a “buy” rating in a research note on Saturday, October 31st. One research analyst has rated the stock with a Strong Buy rating, seven have given a Buy rating and six have given a Hold rating to the stock. Based on data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average target price of $39.85.
View Our Latest Report on CARG
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.
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