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

CarGurus (NASDAQ:CARG) announced its quarterly earnings results on Thursday. The company reported $0.66 earnings per share (EPS) for the quarter, beating 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 return on equity of 59.79% and a net margin of 18.06%.During the same quarter in the previous year, the business earned $0.57 earnings per share. CarGurus’s quarterly revenue was up 7.2% on a year-over-year basis. 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 CARG traded up $2.61 during midday trading on Friday, hitting $38.99. 2,180,161 shares of the company’s stock traded hands, compared to its average volume of 1,018,019. The stock has a market capitalization of $3.52 billion, a price-to-earnings ratio of 21.19, a price-to-earnings-growth ratio of 1.33 and a beta of 1.17. CarGurus has a 1 year low of $26.39 and a 1 year high of $41.22. The firm’s fifty day moving average is $32.85 and its 200-day moving average is $32.65.

Insider Buying and Selling at CarGurus

In other CarGurus news, insider Jennifer Ladd Hanson sold 2,499 shares of the firm’s stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $34.56, for a total value of $86,365.44. Following the completion of the transaction, the insider owned 92,894 shares of the company’s stock, valued at approximately $3,210,416.64. This trade represents a 2.62% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Matthew Todd Quinn sold 3,824 shares of the firm’s stock in a transaction that occurred on Thursday, July 2nd. The stock was sold at an average price of $35.03, for a total transaction of $133,954.72. Following the sale, 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 SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 31,764 shares of company stock worth $1,071,649. 18.19% of the stock is owned by insiders.

Institutional Investors Weigh In On CarGurus

Large investors have recently modified their holdings of the business. Invesco Ltd. raised its position in shares of CarGurus by 1.5% in the fourth quarter. Invesco Ltd. now owns 1,702,402 shares of the company’s stock valued at $65,287,000 after buying an additional 24,788 shares during the last quarter. Mercer Global Advisors Inc. ADV grew its stake 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 acquiring an additional 3,385 shares in the last quarter. Vident Advisory LLC grew its stake 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 acquiring an additional 2,207 shares in the last quarter. XTX Topco Ltd purchased a new position in CarGurus in the 4th quarter worth approximately $900,000. Finally, Kensington Investment Counsel LLC purchased a new position in CarGurus in the 4th quarter worth approximately $1,182,000. Hedge funds and other institutional investors own 86.90% of the company’s stock.

CarGurus News Summary

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.

Analyst Ratings Changes

A number of equities analysts recently commented on CARG shares. Weiss Ratings downgraded shares of CarGurus from a “hold (c+)” rating to a “hold (c)” rating in a research note on Wednesday, May 13th. Piper Sandler reaffirmed a “sector weight” rating on shares of CarGurus in a research report on Friday, June 12th. Citigroup started coverage on CarGurus in a report on Friday, June 12th. They issued a “buy” rating on the stock. Royal Bank Of Canada upped their price objective on CarGurus from $35.00 to $42.00 and gave the stock an “outperform” rating in a research note on Friday. Finally, BTIG Research raised their price objective on CarGurus from $40.00 to $41.00 and gave the company a “buy” rating in a research report on Friday. One equities research analyst has rated the stock with a Strong Buy rating, eight have issued a Buy rating and six have assigned a Hold rating to the stock. According to MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average price target of $40.25.

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.