Dealer Additions Driving CarGurus Growth

CARG provides an online platform to buy and sell vehicles. The company’s business operates in two primary areas, one focusing on the U.S. and the other on digital wholesale efforts. CarGurus customers can search for new and used vehicles from its dealers as well as sell their cars to dealers. The company has steadily been adding dealers in the U.S. and elsewhere and providing them with customers ready to buy and tools to find other customers.

As for earnings, CARG will announce its fourth-quarter fiscal 2024 earnings later this month. But in its last earnings report, the company showed strong international revenue growth of 23% on a year-over-year basis. Much of that was in Canada, where the company is increasing its market share faster than competitors. The company is eyeing more growth, has $247 million in reserves, and plans to repurchase its shares this year.

It’s no wonder CARG shares are up almost 66% in a year – and they could rise more. MAPsignals data shows how Big Money investors are betting heavily on the forward picture of the stock.

CarGurus Share Growth Fueled by Big Money

Institutional volumes reveal plenty. In the last year, CARG has enjoyed strong investor demand, which we believe to be institutional support.

Each green bar signals unusually large volumes in CARG shares. They reflect our proprietary inflow signal, pushing the stock higher:

Plenty of technology names are under accumulation right now. But there’s a powerful fundamental story happening with CarGurus.

CarGurus Fundamental Analysis

Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, CARG has had strong sales growth and trades at an attractive valuation right now:

• 3-year sales growth rate (+33.9%)
• Forward price-to-earnings ratio (+22.8x earnings)

Source: FactSet

Also, EPS is estimated to ramp higher this year by +10.4%.

Now it makes sense why the stock has been powering to new heights. CARG has a track record of strong financial performance.

Marrying great fundamentals with our proprietary software has found some big winning stocks over the long term.

CarGurus has been a top-rated stock at MAPsignals. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

It’s made the rare Top 20 report multiple times in the last year, with more potentially on the horizon. The blue bars below show when CARG was a top pick…accelerating growth:

Tracking unusual volumes reveals the power of money flows.

This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward.

CarGurus Price Prediction

The CARG rally isn’t new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no position in CARG at the time of publication.

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