Personal Finance

Why Shares of CarGurus Are Up 19% Today

A hand holding a car key in the foreground, a row of vehicles at an auto dealership in the background.

What happened

Shares of online auto sales marketplace CarGurus, Inc. (NASDAQ: CARG) were sharply higher on Wednesday following a second-quarter earnings result that exceeded Wall Street's expectations.

As of 12:00 p.m. EDT on Wednesday, CarGurus' stock was trading around $54.40, up 19.3% from Tuesday's close.

A hand holding a car key in the foreground, a row of vehicles at an auto dealership in the background.

Image source: Getty Images.

So what

Massachusetts-based CarGurus, which went public last October , said that its net income excluding special items (or what it calls "non-GAAP net income") rose 60%, to $6.9 million in the second quarter of 2018. Revenue increased 45% to $110.3 million. The story is simple and good: Business boomed. CarGurus' total number of paying dealer partners rose 20% from the year-ago quarter, and its website traffic was up 56%.

On a per-share basis, excluding special items, CarGurus earned $0.06 per share. That was up 50% from a year ago, and it soundly beat Wall Street's consensus $0.04 per-share estimate.

Now what

CarGurus also boosted its full-year guidance. It now expects:

  • Revenue between $436 million and $438 million (prior guidance: $415 million to $418 million)
  • Non-GAAP operating income between $28.5 million to $30.5 million (prior guidance: $25 million to $28 million)
  • Non-GAAP earnings per share of $0.22 to $0.23 (prior guidance: $0.19 to $0.21)

10 stocks we like better than CarGurus, Inc.

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and CarGurus, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 6, 2018

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

CARG

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More