CarGurus (NASDAQ:CARG) Surprises With Q3 Sales, Stock Soars

Core Insights - CarGurus reported Q3 CY2025 revenue of $238.7 million, exceeding Wall Street expectations by 3.2% year on year and beating analyst estimates by 1.6% [1][6] - The company provided optimistic guidance for Q4 CY2025, projecting revenue of $238.5 million, which is 0.6% above analysts' estimates [1][6] - Non-GAAP profit for Q3 was $0.57 per share, surpassing consensus estimates by 3.7% [1][6] Company Overview - CarGurus operates as a digital marketplace connecting auto dealers with potential customers, facilitating browsing, purchasing, and financing of vehicles [4] Revenue Growth - Despite a recent quarter of growth, CarGurus has faced challenges over the past three years, with an annual sales decline of 18.4% [5] - The company reported an adjusted EBITDA of $78.67 million, significantly beating analyst expectations [6] Financial Metrics - Operating margin improved to 22.9%, up from 11.9% in the same quarter last year [6] - Free cash flow margin decreased to 26.8% from 27.9% in the previous quarter [6] - The number of paying dealers increased to 33,673, reflecting a year-on-year growth of 1,989 [6] - Market capitalization stands at $3.38 billion [6] Future Outlook - Analysts project a revenue growth of 3.9% over the next 12 months, indicating expectations for improved performance from newer products and services, although this growth rate is still below the sector average [7]