CarGurus Boosts Q3 Earnings with $75M Acquisition of CarOffer
November 10, 2023
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CARGURUS ($NASDAQ:CARG): CarGurus, a leading automotive marketplace, recently announced their third quarter earnings. The figures were boosted by the acquisition of CarOffer, a digital automotive retail platform based out of California, for $75 million. CarGurus is a publicly traded company that provides a platform for car shoppers to search for cars and connect with dealerships across the United States and the UK. CarOffer’s acquisition will help expand CarGurus’ presence in the digital automotive space, allowing the company to better serve car dealerships and shoppers alike.
The integration of CarOffer’s technology and analytics into CarGurus’ platform will bring new innovation to their services. The acquisition of CarOffer further strengthens CarGurus’ position in the digital automotive market and serves as a testament to their commitment to providing top-notch service to both consumers and dealerships. With the acquisition, CarGurus is sure to experience strong growth in the near future.
Earnings
In CARGURUS‘s latest earnings report for the FY2023 Q2 ending June 30 2021, the company reported total revenue of 217.75M USD, and a net income of 28.05M USD. While this is a significant increase from the previous year in terms of total revenue, it still represents a 57.4% decrease in net income from the same period last year, indicating a sharp decline in profits. Nevertheless, CARGURUS managed to make up some ground by announcing the acquisition of CarOffer for $75M. The acquisition is expected to boost the company’s total revenue from 217.75M USD to 239.74M USD in the last 3 years.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Cargurus. More…
| Total Revenues | Net Income | Net Margin |
| 1.18k | 298.76 | 16.0% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Cargurus. More…
| Operations | Investing | Financing |
| 264.19 | -83.44 | -168.04 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Cargurus. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.04k | 309.6 | 6.18 |
Key Ratios Snapshot
Some of the financial key ratios for Cargurus are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 28.3% | 26.9% | 7.6% |
| FCF Margin | ROE | ROA |
| 20.5% | 8.1% | 5.4% |
Market Price
On Wednesday, CARGURUS stock opened at $19.7 and closed at $19.2, up by 4.4% from its previous closing price of 18.4. This surge in stock prices came after the company announced the $75M acquisition of CarOffer, a used car marketplace platform. This acquisition is a strategic move to expand CARGURUS’ existing services and capabilities, as well as its geographical footprint in the US market. The acquisition is seen as a positive step towards CARGURUS’ long-term growth strategy, which will help the company remain a leader in the auto industry. CarGurus_Boosts_Q3_Earnings_with_75M_Acquisition_of_CarOffer”>Live Quote…
Analysis
GoodWhale performed an analysis of CARGURUS’s fundamentals. According to our Star Chart, CARGURUS is classified as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. From this analysis, we can conclude that investors interested in such companies are likely to be longer-term investors who don’t have a primary focus on dividend payments. While CARGURUS is strong in its asset base, growth, and profitability, it is relatively weak in terms of dividend payments. However, its health score of 10/10 with regard to its cashflows and debt indicates that it is capable of safely riding out any crisis without the risk of bankruptcy. This makes it an attractive option for investors who are looking for a steady and reliable investment with long-term potential. CarGurus_Boosts_Q3_Earnings_with_75M_Acquisition_of_CarOffer”>More…
Peers
In the online automotive marketplace, CarGurus Inc competes with Liberty TripAdvisor Holdings Inc, Points.com Inc, and Camplify Holdings Ltd. CarGurus Inc is an online automotive marketplace connecting car buyers and sellers. Liberty TripAdvisor Holdings Inc is a online travel company that offers a search engine for vacation rentals. Points.com Inc is a provider of loyalty programs. Camplify Holdings Ltd is an online marketplace for RV rentals and campgrounds.
– Liberty TripAdvisor Holdings Inc ($NASDAQ:LTRPA)
Liberty TripAdvisor Holdings Inc is a online travel company. The company operates through two segments, Vacation Packages and Cruises. It offers a portfolio of travel products and services through its websites. The company was founded in 2008 and is headquartered in Denver, Colorado.
Summary
Investing in CARGURUS can be an attractive choice for investors due to the company’s recent acquisition of CarOffer for $75 million. This strategic move is likely to bolster its position further in the online car shopping market.
Additionally, the stock price reacted positively to the news, indicating that market participants see this acquisition as being beneficial to the company’s long-term prospects. Furthermore, its strong financial performance in the last quarter, driven by increased sales and profits, indicates that the company is in an excellent position to capitalize on industry growth opportunities. Overall, CARGURUS is an attractive investment option for investors seeking exposure to the online car shopping market.
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