D/E 0.79 — near the Consumer Cyclical debt median (≈60th pctile)
P/E18.2xB
P/E 18.2 — near the Consumer Cyclical median (≈60th pctile)
PEG1.08B+
PEG 1.08 — near fair value, classic Lynch benchmark (1.0)
Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.
Quality-growth score · 82.8
Quality0.87
Growth0.86
Value0.76
Why this score
Buying back stock
Entry · Margin of safety
52-week rangeMid-range
12% off the 12-month high
vs DCF fair value38% belowest. fair value ~$55
Quality signals · context only
Gross profitability169% · Agross profit ÷ total assets (Novy-Marx)
ROIC79.5% · Areturn on invested capital — not score-weighted
Why now
CarGurus is a high-quality compounder leveraging its online automotive platform to connect car shoppers with an extensive network of dealers, driving robust financial performance. Its 13.7% FY YoY revenue growth is efficiently converted into $293m in TTM free cash flow, while trading at a reasonable 18 times TTM earnings. The thesis rests on the continued expansion and monetization of its integrated suite of products, particularly the Digital Deal option, which streamlines the vehicle purchase process online and solidifies its market position.
Moat
CarGurus' durable edge stems from the powerful network effect of its online automotive marketplace, which connects a large audience of car shoppers with an extensive network of dealers, creating significant value for both sides. This self-reinforcing ecosystem, coupled with its integrated suite of products like Digital Deal and Dealership Mode, fosters high switching costs for dealers and consumers. The company's exceptional 62.9% Return on Equity demonstrates its ability to generate outsized profits, driven by pricing power derived from its category leadership and the operational leverage inherent in its platform model.
Risk
The primary bear case for CarGurus centers on the cyclical nature of the auto industry and intense competition within the online automotive marketplace, which could pressure its core revenue streams from dealer subscription fees and advertising. Its 0.79 debt-to-equity ratio, while manageable, adds a layer of financial risk should a significant downturn in vehicle sales impact its cash flow generation. A sustained deceleration in its 13.7% revenue growth, coupled with increasing competitive pressure on its dealer network, would confirm that its growth premium is unwarranted.
Horizon
1-3 yr $37.38 (13-analyst consensus) — fundamentals + valuation re-rating. 5 yr $54.73 at ~10% CAGR — compounding case rests on the competitive position widening. 10 yr $81.20 if current growth sustains into durable earnings power.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.
Position sizing · CARG
$
%
%
Shares to buy
57
Position size
$1,967
3.9% of portfolio
Stop price
$25.88
25% below $34.50
$ at risk if stopped
$491.63
budget $500.00 · 1% of portfolio
Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.
CarGurus, Inc. (CARG): score, valuation & FAQ
CarGurus, Inc. (CARG) is a Auto & Truck Dealerships company that scores 82.8 out of 100 on the Bull Rankings quality-growth model — a strong reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.
Its strongest graded signals are Rev (B+) and PEG (B+). On valuation, CARG sits about 38% below our discounted-cash-flow fair value (a margin of safety).
Is CARG a good stock to buy?
Bull Rankings scores CARG 82.8 out of 100 on its quality-growth model, which is a strong reading. That is driven by Rev (B+) and PEG (B+). A score is a quantitative screen of CarGurus, Inc.'s fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.
Why does CARG score 82.8 on Bull Rankings?
The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). CARG earns its highest marks on Rev (B+) and PEG (B+). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.
Is CARG overvalued or undervalued?
Based on $34.50, CARG sits about 38% below our discounted-cash-flow fair value (a margin of safety). It trades at a 18.2x× P/E (graded B). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.
What are the main risks of investing in CARG?
The primary bear case for CarGurus centers on the cyclical nature of the auto industry and intense competition within the online automotive marketplace, which could pressure its core revenue streams from dealer subscription fees and advertising. Its 0.79 debt-to-equity ratio, while manageable, adds a layer of financial risk should a significant downturn in vehicle sales impact its cash flow generation. A sustained deceleration in its 13.7% revenue growth, coupled with increasing competitive pressure on its dealer network, would confirm that its growth premium is unwarranted.
Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial adviser.