What To Expect From CarGurus's (CARG) Q4 Earnings

Online auto marketplace CarGurus (NASDAQ:CARG) will be reporting results this Thursday afternoon. Here’s what you need to know.

CarGurus beat analysts’ revenue expectations by 1.6% last quarter, reporting revenues of $238.7 million, up 3.2% year on year. It was a strong quarter for the company, with EBITDA guidance for next quarter topping analysts’ expectations and a decent beat of analysts’ EBITDA estimates. It reported 33,673 users, up 6.3% year on year.

Is CarGurus a buy or sell going into earnings?

This quarter, analysts are expecting CarGurus’s revenue to grow 4.7% year on year to $239.2 million, improving from the 2.4% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.63 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. CarGurus has missed Wall Street’s revenue estimates three times over the last two years.

Looking at CarGurus’s peers in the consumer internet segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Shutterstock’s revenues decreased 12% year on year, missing analysts’ expectations by 12.7%, and Instacart reported revenues up 12.3%, topping estimates by 2%. Instacart traded up 7.7% following the results.

The outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. Unfortunately, consumer internet stocks have struggled in this environment as share prices are down 18.7% on average over the last month. CarGurus is down 16.5% during the same time and is heading into earnings with an average analyst price target of $40.29 (compared to the current share price of $27.98).

When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares.