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CarGurus - AI Stock Analysis

Analysis generated September 24, 2024

CarGurus is an online automotive marketplace that connects buyers and sellers of new and used cars. The platform provides users with tools to compare local listings, find deals, and connect with dealerships, simplifying the car buying process. As a tech-driven company, CarGurus leverages data and advanced algorithms to provide market transparency and an efficient ecosystem for both consumers and dealers.

Fundamental Analysis

CarGurus reported revenue of $219M for the last quarter, representing a modest increase of 1.58% from the previous quarter. While this quarterly growth is a positive sign, revenue is down by 8.78% compared to the same quarter last year, which could indicate underlying challenges.

The net income for the last quarter was $69M, a sharp decline of 422.62% from the previous quarter, and a disturbing drop of 518.70% from the same quarter last year. These dramatic decreases highlight significant issues in profitability, possibly driven by increased expenses or reduced operational efficiency.

EBITDA for the last quarter came in at $88M, down by 370.08% from the previous quarter and 403.14% from the same quarter last year. The declines in both net income and EBITDA are alarming for investors.

The current price-to-earnings (P/E) ratio of CarGurus is 92.9, which is considered high. A high P/E ratio may indicate that the stock is overvalued or that investors are expecting high growth rates in the future. However, it may also signal a bearish outlook if growth does not occur as anticipated.

Additionally, recent insider sales may pose a bearish signal, suggesting that those closely tied to the company may not be optimistic about its short-term prospects.

Technical Analysis

Today’s stock price is $30.06, reflecting a 4.67% increase from a month ago, which signals a positive short-term trend. Moreover, the stock has grown by a substantial 72.16% over the past year, suggesting strong long-term bullish momentum.

The current 10-day Simple Moving Average (SMA10) is $29.93, slightly higher than the previous SMA10 of $29.84, indicating a potential upward movement in price. The Relative Strength Index (RSI) currently stands at 49.8, positioning in a neutral zone, meaning the stock is neither overbought nor oversold.

Alternative Data Analysis

CarGurus has 43 open positions according to data from leading job boards. This number has decreased by 9% in the past few months, which may indicate efforts to cut costs or improve margins, a move that may be seen as contractionary in the context of growth.

The company sees an estimated 48 million visitors to its webpage, with no significant up or down movements recently, indicating stable customer traffic. Furthermore, CarGurus reports around 5,100 daily mobile app downloads, a notable increase of 28% in the last couple of months. This surge suggests growing customer engagement and potential future revenue growth from mobile users.

On social media, CarGurus has 170,000 followers on Instagram, an increase of 12% over the past few months, indicating rising interest and engagement. Conversely, the 12,000 followers on Twitter shows no significant change, implying a stable social media presence on that platform.

According to AltIndex’s AI score, which integrates fundamental, technical, and alternative data, CarGurus holds a score of 76, indicating a buy signal. This AI-driven analysis suggests an overall positive outlook for the company's stock.

Conclusion and Recommendation

Based on the collected data and analyses, CarGurus presents a mixed outlook for potential investors. The fundamental analysis shows troubling signs of profitability issues with significant declines in net income and EBITDA. However, technical indicators suggest a bullish trend with increasing stock prices both in the short and long term.

Alternative data metrics offer a more optimistic view, showing increases in mobile app downloads and social media engagement, reflecting growing customer interest and potential. The AI score of 76 further reinforces a buy signal.

In conclusion, while there are concerns regarding profitability, the overall growth potential and market sentiment could justify cautious optimism for CarGurus. Thus, the recommendation would be to consider buying CarGurus stock, keeping an eye on future earnings reports and market conditions to mitigate any potential risks.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.