| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 67 | 18.6x | 17.8x | Top tier | |
Growth | 57 | 21.2% | 7.1% | Around median | |
Quality | 98 | 33.8% | 4.5% | Top tier | |
Safety | 87 | 0.2x | 2.6x | Top tier | |
Capital Return | 84 | — | 2.12% | Top tier | |
Momentum | 59 | 6.7% | 2.9% | Around median | |
Sentiment | 42 | 8 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
CarGurus operates a digital automotive marketplace platform that connects consumers with dealers and generates revenue primarily from dealer subscriptions and listing, marketing, data, and lead-conversion products, along with advertising from automakers. The company is expanding beyond the listings marketplace into four pillars within the dealer workflow: inventory, marketing, lead conversion, and market and competitive data. These products are supported by approximately 500 million daily signals related to demand, pricing, inventory, and shopper behavior.
In Q2 fiscal 2026, revenue increased 13% year over year to $251.0 million, driven by the adoption of add-on products, while international business grew 28% and U.S. CARSID grew 8% with the addition of 673 paying U.S. dealers. Gross profit under EDGAR was approximately $231.1 million, representing a margin of about 92%, while net income was $49.2 million and earnings per share were $0.54. The company also reported adjusted EBITDA of $85 million at a 34% margin and generated $88 million in free cash flow, equal to 103% of adjusted EBITDA.
The growth mix reflects the expanding contribution of add-on products in the United States and the strength of international operations; add-on products were the largest driver of the annual increase in CARSID and the largest driver of sequential improvement for the third consecutive quarter. The international business benefited from listings and Sell My Car in Canada and automaker advertising in the United Kingdom, while the automaker business exceeded management's expectations due to consumer interest in certified pre-owned vehicles amid new-car affordability challenges.
Automated analysis for informational purposes only — not investment advice.
The analyst consensus rates CARG shares as “Buy,” with an average price target of $41.17 and a target range of between $35 and $44. The average is only five cents below the top of the 52-week range of $41.22, reflecting an expectation that the value will reach an area near the year's highs, but the dispersion of targets, management's outlook for slower growth in Q3, and fiscal 2026 margin contraction justify incorporating execution risk into the valuation assessment.
Figures in the text are as of 2026-09-10; the live price is shown at the top of the page.
Revenue rose 13% year over year to $251 million, exceeding the midpoint of management's guidance range. Add-on products were the largest driver of annual CARSID growth, followed by listing upgrades, like-for-like price increases, and improvements in lead quantity and quality. U.S. CARSID grew 8%, and the company added 673 paying U.S. dealers, while international business revenue increased 28%.
The company uses artificial intelligence in Guru, VINMAX, PriceVantage, and shopper signal tools, drawing on approximately 500 million daily signals about demand, pricing, inventory, and behavior. Since VINMAX's early rollout began in February 2026, promoted listings have sold 23% faster and generated 34% more daily leads. After the Guru brand launched in July 2026, the number of leads it generated in the United States rose 60% sequentially.
PriceVantage is a predictive analytics product that helps dealers make pricing and inventory decisions based on consumer demand and the spread between wholesale and retail prices. Its bookings grew more than 50% sequentially in Q2 fiscal 2026. After adoption, dealers recorded a 15% increase in vehicle detail page views and a 9% increase in leads per listing, and management explained that adoption included both independent and franchise dealers.
The company expects Q3 fiscal 2026 revenue of between $253.5 million and $258.5 million, equivalent to annual growth of between 9% and 12%. It expects adjusted EBITDA of between $82 million and $90 million and non-GAAP earnings per share of between $0.63 and $0.69. For fiscal 2026, management maintained its revenue growth forecast of between 10% and 13% and raised its profitability outlook to an adjusted EBITDA margin contraction of 50 to 150 basis points compared with fiscal 2025.
The company generated $88 million in free cash flow in Q2 fiscal 2026, equivalent to 103% of adjusted EBITDA of $85 million. It ended the quarter with $122 million in cash and cash equivalents, an increase of $50 million from the end of Q1 fiscal 2026, despite repurchasing $29 million of shares during the quarter. Since 2022, total repurchases have reached approximately $925 million, representing more than 30% of shares outstanding.
The primary operating risk is continued caution in dealer spending due to pressure on their margins, shorter vehicle inventory holding periods, and the U.S. Federal Trade Commission's all-in price transparency requirements. The adjusted EBITDA margin also declined by approximately 200 basis points year over year to 34% in Q2 fiscal 2026, and management expects the fiscal 2026 margin to remain 50 to 150 basis points below fiscal 2025. Q3 growth guidance of 9% to 12%, compared with 13% growth in Q2, adds the risk of slowing revenue if contracted revenue from new products does not accumulate as management expects.
