Fact based stock research
CarGurus (NasdaqGS:CARG)
US1417881091
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
CarGurus stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 24 (worse than 76% compared with investment alternatives), CarGurus (Interactive Media & Services, USA) shares have lower financial characteristics compared with similar stocks. Shares of CarGurus are low in value (priced high) with a consolidated Value Rank of 16 (worse than 84% of alternatives) and show below-average growth (Growth Rank of 17) but are safely financed (Safety Rank of 75), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 24, is a sell recommendation based on CarGurus's financial characteristics. As the company CarGurus's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 16) and low growth (Obermatt Growth Rank of 17), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 75) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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Country | USA |
Industry | Interactive Media & Services |
Index | Employee Focus US, NASDAQ |
Size class | Large |
18-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.
Review the performance ranks of the individual metrics that form each investment strategy.
Research History: CarGurus
RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
VALUE | ||||||||
VALUE | 24 |
|
65 |
|
23 |
|
16 |
|
GROWTH | ||||||||
GROWTH | 94 |
|
99 |
|
53 |
|
17 |
|
SAFETY | ||||||||
SAFETY | 93 |
|
75 |
|
75 |
|
75 |
|
SENTIMENT | ||||||||
SENTIMENT | n/a |
|
49 |
|
94 |
|
new | |
360° VIEW | ||||||||
360° VIEW | n/a |
|
95 |
|
52 |
|
new |
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 24 (worse than 76% compared with investment alternatives), CarGurus (Interactive Media & Services, USA) shares have lower financial characteristics compared with similar stocks. Shares of CarGurus are low in value (priced high) with a consolidated Value Rank of 16 (worse than 84% of alternatives) and show below-average growth (Growth Rank of 17) but are safely financed (Safety Rank of 75), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 24, is a sell recommendation based on CarGurus's financial characteristics. As the company CarGurus's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 16) and low growth (Obermatt Growth Rank of 17), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 75) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
VALUE | ||||||||
VALUE | 24 |
|
65 |
|
23 |
|
16 |
|
GROWTH | ||||||||
GROWTH | 94 |
|
99 |
|
53 |
|
17 |
|
SAFETY | ||||||||
SAFETY | 93 |
|
75 |
|
75 |
|
75 |
|
COMBINED | ||||||||
COMBINED | 93 |
|
24 |
|
24 |
|
24 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 16 (worse than 84% compared with alternatives), CarGurus shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for CarGurus. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 55, which means that the stock price compared with what market professionals expect for future profits is lower than for 55% of comparable companies, indicating a good value concerning CarGurus's profit levels. But Price-to-Sales is 36 which means that the stock price compared with what market professionals expect for future profits is higher than for 64% of comparable companies, indicating a low value concerning CarGurus's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 29 and for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 16, is a sell recommendation based on CarGurus's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then CarGurus is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
PRICE VS. REVENUES (P/S) | ||||||||
PRICE VS. REVENUES (P/S) | 35 |
|
62 |
|
34 |
|
36 |
|
PRICE VS. PROFITS (P/E) | ||||||||
PRICE VS. PROFITS (P/E) | 55 |
|
76 |
|
69 |
|
55 |
|
PRICE VS. CAPITAL (Market-to-Book) | ||||||||
PRICE VS. CAPITAL (Market-to-Book) | 19 |
|
42 |
|
39 |
|
29 |
|
DIVIDEND YIELD | ||||||||
DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
CONSOLIDATED RANK: VALUE | ||||||||
CONSOLIDATED RANK: VALUE | 24 |
|
65 |
|
23 |
|
16 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), CarGurus shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for CarGurus. Sales Growth has a below market rank of 45, which means that, currently, professionals expect the company to grow less than 55% of its competitors. The same is valid for Capital Growth, with a rank of 7, and Profit Growth, with a rank of 8. Currently, professionals expect the company to grow its profits less than 92% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 56, which means that the stock returns have recently been above 56% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for CarGurus, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more
GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
REVENUE GROWTH | ||||||||
REVENUE GROWTH | 84 |
|
87 |
|
37 |
|
45 |
|
PROFIT GROWTH | ||||||||
PROFIT GROWTH | n/a |
|
63 |
|
31 |
|
8 |
|
CAPITAL GROWTH | ||||||||
CAPITAL GROWTH | n/a |
|
98 |
|
56 |
|
7 |
|
STOCK RETURNS | ||||||||
STOCK RETURNS | 68 |
|
85 |
|
87 |
|
56 |
|
CONSOLIDATED RANK: GROWTH | ||||||||
CONSOLIDATED RANK: GROWTH | 94 |
|
99 |
|
53 |
|
17 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 75 (better than 75% compared with alternatives) for 2022, the company CarGurus has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of CarGurus is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for CarGurus. Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Refinancing is at a rank of 57, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 57% of its competitors. Finally, Liquidity is also good at a rank of 94, which means that the company generates more profit to service its debt than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 75 (better than 75% compared with alternatives), CarGurus has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with CarGurus but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more
SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
LEVERAGE | ||||||||
LEVERAGE | 74 |
|
100 |
|
100 |
|
100 |
|
REFINANCING | ||||||||
REFINANCING | 72 |
|
47 |
|
69 |
|
57 |
|
LIQUIDITY | ||||||||
LIQUIDITY | 77 |
|
94 |
|
94 |
|
94 |
|
CONSOLIDATED RANK: SAFETY | ||||||||
CONSOLIDATED RANK: SAFETY | 93 |
|
75 |
|
75 |
|
75 |
|
Sentiment Metrics in Detail
SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
---|---|---|---|---|---|---|---|---|
ANALYST OPINIONS | ||||||||
ANALYST OPINIONS | n/a |
|
76 |
|
55 |
|
new | |
OPINIONS CHANGE | ||||||||
OPINIONS CHANGE | n/a |
|
50 |
|
83 |
|
new | |
PRO HOLDINGS | ||||||||
PRO HOLDINGS | n/a |
|
15 |
|
88 |
|
new | |
MARKET PULSE | ||||||||
MARKET PULSE | n/a |
|
38 |
|
81 |
|
new | |
CONSOLIDATED RANK: SENTIMENT | ||||||||
CONSOLIDATED RANK: SENTIMENT | n/a |
|
49 |
|
94 |
|
new |
Stock analysis by the purely fact based Obermatt Method for CarGurus from April 18, 2024.
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