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Wall Street Analysts See a 30.37% Upside in Cars.com (CARS): Can the Stock Really Move This High?
ZACKS· 2025-08-28 14:56
Core Viewpoint - Cars.com (CARS) shows potential for significant upside, with a mean price target of $17.17 indicating a 30.4% increase from its current price of $13.17 [1] Price Targets and Analyst Consensus - The average price target for CARS ranges from a low of $11.00 to a high of $25.00, with a standard deviation of $5.38, indicating variability in analyst estimates [2] - The lowest estimate suggests a decline of 16.5%, while the highest points to an upside of 89.8% [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Analyst Optimism - Analysts have shown increasing optimism about CARS' earnings prospects, with a positive trend in earnings estimate revisions [11] - Over the last 30 days, one estimate has increased, leading to a 9.9% rise in the Zacks Consensus Estimate for the current year [12] - CARS holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - While price targets are commonly referenced, they can mislead investors, as empirical research shows they rarely indicate actual stock price movements [7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]
CarGurus: Upgrade To Buy As The Equity Story Is Now A Lot Cleaner And Better
Seeking Alpha· 2025-08-12 13:35
Analyst's Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or a ...
CarGurus(CARG) - 2025 Q2 - Earnings Call Transcript
2025-08-07 22:00
Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $234 million, up 7% year over year, slightly above the midpoint of guidance range [28] - Marketplace revenue was $222 million, up 14% year over year, driven by strength in subscription-based listings revenue [29] - Adjusted EBITDA was approximately $77 million, up 39% year over year, with an adjusted EBITDA margin of 33%, reflecting strong revenue growth and operating leverage [32][33] - Non-GAAP diluted earnings per share was $0.57, up 46% year over year [35] Business Line Data and Key Metrics Changes - Marketplace performance was a key contributor, with adjusted EBITDA growing 31% year over year [6] - International business revenue grew 28% year over year, with significant growth in Canada and the UK [7] - Wholesale revenue was approximately $6 million, down 52% year over year, driven by a 55% decrease in transaction volume [31] Market Data and Key Metrics Changes - The UK was the number one most downloaded automotive app in Q2, indicating rising consumer engagement [7] - CarGurus had nearly 85 million average monthly sessions and 34 million monthly unique visitors, with consumers spending 74% more total minutes on the site than the closest competitor [21] Company Strategy and Development Direction - The company is focusing on providing data-driven, scalable solutions to dealers, emphasizing technology and analytics for smarter sourcing and pricing [10] - A strategic reassessment led to the decision to wind down the CarOffer transactions business, while retaining the underlying technology for future sourcing strategies [10][26] - Future sourcing offerings will concentrate on AI-powered inventory intelligence and consumer vehicle sourcing at scale [27] Management's Comments on Operating Environment and Future Outlook - Management noted that while used inventory is up year over year, it has not returned to pre-COVID levels, indicating ongoing opportunities for dealers [50] - The macro environment remains uncertain, with high interest rates and elevated used car prices impacting dealer operations [58] - Management expressed confidence in the company's ability to grow engagement and provide value to dealers despite market challenges [59] Other Important Information - The company plans to execute against a clear set of priorities and invest in areas positioned for durable profitable growth [28] - A $150 million increase to the existing share repurchase program was approved, reinforcing the company's commitment to returning capital to shareholders [38] Q&A Session Summary Question: How should we think about dealer count or revenue per dealer? - Management indicated there is significant opportunity for existing products among the dealer base, with over 50% runway on most cross-sell products [44][46] Question: What's the outlook on increasing used supply as off-lease units come back? - Management noted that while used inventory is increasing, it is not at pre-COVID levels, and they see potential in sourcing intelligence to help dealers navigate the market [50][51] Question: Are dealers more willing to open their budgets with more certainty around tariffs? - Management acknowledged some easing of anxiety but emphasized ongoing uncertainty due to high interest rates and elevated used car prices [56][58] Question: How does the rise of AI tools affect the marketplace model? - Management highlighted the importance of their AI-driven tools like CG Discover, which enhance the consumer experience and engagement [63][66] Question: How do you plan to continue addressing the dealer-to-dealer side of the business? - Management confirmed plans to provide DDD capabilities through top dealer offers and emphasized the importance of predictive analytics for inventory management [83][84] Question: Will the company consider expanding beyond Canada and the UK? - Management stated that they will focus on current international markets where they are seeing strong performance [85]
CarGurus (CARG) Q2 EPS Jumps 46%
The Motley Fool· 2025-08-07 21:11
Core Insights - CarGurus reported Q2 2025 GAAP revenue of $234.0 million, slightly exceeding analyst estimates of $232.7 million, with non-GAAP earnings per share of $0.57, surpassing expectations [1][2] - The company announced the winding down of its CarOffer transactions business due to underperformance, refocusing on its core Marketplace platform and data-driven dealer solutions [1][7] Financial Performance - Non-GAAP EPS increased by 46.2% year-over-year to $0.57, while GAAP revenue rose by 7% compared to Q2 2024 [2] - Gross profit (GAAP) reached $204.4 million, a 12.1% increase from the previous year, with gross margin improving to 87% [2][8] - Non-GAAP adjusted EBITDA grew by 39% to $77.3 million, reflecting a 33% margin, up from 25% in Q2 2024 [2][8] - Free cash flow (non-GAAP) surged by 61.6% year-over-year to $65.3 million [2][8] Business Segments - The Marketplace business generated $222.0 million in revenue, a 14% increase year-over-year, with operating income for the U.S. segment rising 40% to $58.8 million [5] - The number of U.S. paying dealers increased by 4% to 25,478, while international paying dealers grew by 10% to 7,617 [5][6] - The Digital Wholesale segment, primarily from CarOffer, saw a 49% revenue decline to $12.0 million, with transaction volumes dropping 55% [7] Strategic Focus - CarGurus is prioritizing technological innovation, particularly in AI and analytics tools to enhance dealer workflow and consumer experience [4] - The company plans to retain and expand its AI-powered dealer analytics and inventory intelligence offerings while improving core Marketplace functionalities [10] Market Outlook - For Q3 2025, management projects Marketplace revenue between $228–$233 million and non-GAAP EPS of $0.50–$0.58 [12] - Transition costs related to the CarOffer wind-down are expected to be between $14.0–19.0 million, primarily in the second half of 2025 [12] - The company emphasizes its competitive edge in data, technology, and dealer relationships amid increasing competition from other online auto platforms [11]
CarGurus(CARG) - 2025 Q2 - Earnings Call Presentation
2025-08-07 21:00
Financial Performance - Q2 2025 - Revenue for U S Marketplace & Other increased by 13 7% year-over-year, reaching $222 million[10] - Non-GAAP Gross Profit for U S Marketplace & Other was $206 4 million, with a margin of 93%[10] - Non-GAAP Adjusted EBITDA for U S Marketplace & Other grew by 30 8% year-over-year to $80 1 million, resulting in a 36% margin[10] - Digital Wholesale revenue was $12 million[10], with a Non-GAAP Gross Profit of $0 9 million and a Non-GAAP margin of 7%[10] - The company's Non-GAAP Adjusted EBITDA was $77 3 million, representing a 33% margin[10] Key Business Updates - Digital Deal adoption reached approximately 12,000 dealers, with Digital Deal Leads accounting for over 27% of email leads[15] - Max Margin adoption increased by approximately 70% quarter-over-quarter, while Merchandising Health grew by approximately 30% quarter-over-quarter[17] - Daily active users of the core dealer app functionality increased by 71% year-over-year[17] Dealer Base Growth - The U S paying dealer base grew by 8 5% year-over-year, an increase of 1,743 dealers[19] - The international paying dealer base increased by 19 3% year-over-year[19] - Average Quarterly Revenue per Subscribing Dealer (QARSD) in the U S increased to $7,533, while international QARSD reached $2,309[19] Q3 2025 Guidance - Marketplace Revenue is projected to be between $228 million and $233 million[38] - Non-GAAP Marketplace Adjusted EBITDA is expected to range from $76 5 million to $84 5 million[33]
Cars.com(CARS) - 2025 Q2 - Earnings Call Transcript
2025-08-07 14:00
Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $179 million, reflecting a steady year-over-year performance with a 5% growth in OEM and national revenue, partially offset by temporary softness in dealer revenue [5][21] - Adjusted EBITDA for Q2 was $51 million, with an adjusted EBITDA margin of 28.5%, at the high end of the outlook range, driven by cost efficiencies [27][34] - Net income for Q2 was $7 million, or $0.11 per diluted share, compared to $11 million, or $0.17 per diluted share a year ago [27] Business Line Data and Key Metrics Changes - Dealer count increased to 19,412, up 162 dealers quarter-over-quarter, marking the best sequential organic growth in over three years [5][14] - Solutions products, including AccuTrade and Dealer Club, contributed significantly to growth, with AccuTrade's subscriber base reaching 1,070 dealers [16][21] - Average revenue per dealer (ARPD) was $2,435, down approximately $40 year-over-year and sequentially, attributed to customer and product mix [28] Market Data and Key Metrics Changes - Traffic on the cars.com platform reached a record 162 million in Q2, up 2% year-over-year, with average monthly unique visitors totaling 26.6 million [10] - OEM and national revenue grew 5% year-over-year, with nearly half of OEM partners increasing their spending on the platform [8][25] - The marketplace performance showed strong momentum, with total marketplace customers growing sequentially every month since January [22] Company Strategy and Development Direction - The company is focused on enhancing its marketplace and solutions offerings, with new product innovations and repackaging efforts aimed at driving revenue growth [7][29] - Continued investment in AI features is expected to differentiate the platform and drive lead volume and quality [12][43] - The company anticipates low single-digit revenue growth for 2025, with expectations for acceleration heading into 2026 [9][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve stronger financial results in the second half of 2025, driven by growth initiatives and improved sales velocity [20][34] - There remains uncertainty regarding new vehicle production and pricing forecasts, which could impact discretionary media spending [33] - Management noted that dealer sentiment is improving, with a willingness to compete more aggressively for volume [88] Other Important Information - The company raised its full-year share repurchase target to $70 million to $90 million, consistent with its commitment to return value to shareholders [20][31] - Free cash flow for the year-to-date was $42 million, down year-over-year, primarily due to anticipated earn-out payments [30] Q&A Session Summary Question: Clarification on outlook and acceleration in business - Management expects to see acceleration from Q2 to Q3 to Q4, driven by unit growth and repackaging efforts [38] Question: Average revenue per dealer expectations - Management anticipates that ARPD will improve sequentially from Q2 to Q3 as repackaging takes effect [40] Question: Impact of AI on marketplace model - Management views AI as an opportunity to enhance user experience and engagement, with a focus on integrating AI capabilities into the platform [42][43] Question: Drivers of dealer revenue growth and ARPD decline - The decline in ARPD is attributed to customer mix and product mix, with a growing base of solutions-first customers impacting initial ARPD [49] Question: Retention of AccuTrade customers - Retention is improving, particularly with enterprise-level deals that standardize AccuTrade across multiple stores [66] Question: Marketplace repackaging rollout - The repackaging effort will be rolled out over the course of two quarters, focusing on creating added value for dealers [68] Question: OEM growth as a tailwind - OEM growth is expected to contribute positively to revenue goals in both Q3 and Q4, with management staying close to OEM partners [73] Question: Competitive threat from Amazon - Management acknowledges Amazon as a potential threat but believes the company is well-positioned due to its established platform and strong dealer relationships [78]
TrueCar(TRUE) - 2025 Q2 - Earnings Call Presentation
2025-08-07 13:00
SUPPLEMENTAL MATERIALS Second Quarter 2025 Quarter Ended June 30, 2025 SUPPLEMENTAL MATERIALS Important Information This presentation contains forward-looking statements. All statements other than statements of historical fact contained in this presentation, including our expectations regarding future expected revenue growth and free cash flow, are forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions that may prove incorrect, any of whi ...
Cars.com Stock: Structural Recovery Lacks Confirmation
Benzinga· 2025-07-25 10:46
Core Viewpoint - CARS is currently in Phase 11 of its 18-Phase Adhishthana Cycle, indicating a need for patience despite its attractive value proposition [1] Group 1: Adhishthana Framework - The stock formed a structure known as the Adhishthana Cakra between Phases 4 and 8, typically indicating an arc or consolidation zone [2] - Instead of breaking out in Phase 9, CARS experienced a significant breakdown, leading to a sharp decline from the $20 zone to as low as $9 [4] - Currently in Phase 11, the structure suggests continued consolidation until the Guna Triads begin in Phase 14, which is necessary for a confirmed upward trend [4] Group 2: Monthly and Weekly Analysis - The monthly chart shows CARS in the latter part of Phase 2, known as the Buddhi Move, which is often bullish if the prior Sankhya period was formed correctly [7] - CARS did not collapse during its Sankhya period but traded within a wide range, allowing for the possibility of a Buddhi rally [8] - There is a timing mismatch as Phase 2 ends in March 2027, while the Guna Triads begin in May 2027, raising questions about the potential for a rally before the Guna Triads confirm long-term potential [8] Group 3: Investment Recommendations - The stock is currently bouncing between the $9 to $10 range, appearing to be a value buy, but the unclear weekly structure and unconfirmed Buddhi move complicate the investment decision [8] - Existing investors are advised to hold, especially those with long-term patience, while new investors should wait for structural confirmation likely after Phase 14 begins [9] - CARS is described as a car stuck in neutral, promising on paper but awaiting the right conditions to initiate a rally [9]
CarGurus Launches a Summer of Giveaways Alongside New ‘Big Deal' Video Series Celebrating Life's Biggest Moments
Globenewswire· 2025-07-01 12:59
Core Insights - CarGurus has launched "The Big Deal Show," a campaign celebrating significant moments related to car purchases, featuring well-known personalities from sports and entertainment [3][6] - The campaign includes a three-part series where celebrities share their personal stories and experiences with cars, while also offering a chance to win new vehicles through a sweepstakes [4][5] Company Overview - CarGurus, Inc. is the leading online platform for buying and selling vehicles, recognized as the most visited automotive shopping site in the U.S. [8][9] - The company utilizes proprietary technology and data analytics to enhance the automotive shopping experience, ensuring trust and competitive pricing for consumers [8] Campaign Details - "The Big Deal Show" consists of three episodes released monthly, starting with Tony Hawk and Zeb Powell discussing their car-related memories [4][5] - Each episode is accompanied by a sweepstakes where participants can win a new Nissan valued at approximately $50,000, along with funds for related expenses [5] Marketing Strategy - The campaign is an extension of CarGurus' national brand initiative, "Big Deal," which emphasizes the emotional significance of car purchases and the decisions involved [6] - The initiative aims to connect with consumers by showcasing relatable stories from celebrities, reinforcing the idea that car buying is a significant life event [6][7]
CarGurus: A Great Buy As Traffic Heats Up (Upgrade)
Seeking Alpha· 2025-05-13 12:31
Group 1 - Major trade deals are positively impacting market sentiment, with major indices recovering nearly all losses since the announcement of tariffs [1] - Investors are advised to remain cautious despite the optimistic market outlook [1] - The technology sector is influenced by various themes, as highlighted by the experience of industry analysts [1] Group 2 - The article emphasizes the importance of focusing on industry trends and potential investment opportunities [1]