Value
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.1 |
| P/S | 8.2 |
| EV/EBITDA | 5.1 |
| Fwd P/E | 9.1 |
| PEG | 8.9 |
| Analyst target | 6.0 |
- ▸Forward P/E: 11.2x
- ▸PEG: 0.69
- ▸Attractively valued
CARG · Why this verdict
Why CarGurus (CARG) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score6.5/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
CarGurus is a high-quality internet marketplace with 18% margins, a Piotroski score of 9/9 and a forward P/E near 10.6x, but it is in a confirmed downtrend with earnings in 4 days.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Return on equity is 53%, margins are 18% and the business has a wide moat and a Piotroski score of 9/9. Quality breakdown | Margins stay above 15%. | →Stable |
| CounterMarketplace traffic depends on search engines and dealer budgets, which can shift quickly. | ||
Forward P/E is 10.6x with a PEG of 0.69, labelled attractively valued. Valuation breakdown | Forward P/E stays under 13x. | ↓Deteriorating |
| CounterLow multiples may reflect worries about dealer demand and revenue data issues. | ||
Price is below the 200-day average with its slope down 3.1%, and the death cross is active. Momentum breakdown | Price reclaims the 200-day average. | ↑Improving |
| CounterRSI of 71 suggests a bear rally that could fail. | ||
CarGurus beat EPS in 3 of 3 reported quarters with an average surprise of about 3.2%. Earnings | EPS keeps beating consensus. | →Stable |
| CounterSurprises are small, and earnings are due in 4 days with high short interest of 22%. | ||
Return on equity is 53%, margins are 18% and the business has a wide moat and a Piotroski score of 9/9.
→StableQuality breakdown
- Expectation
- Margins stay above 15%.
CounterMarketplace traffic depends on search engines and dealer budgets, which can shift quickly.
Forward P/E is 10.6x with a PEG of 0.69, labelled attractively valued.
↓DeterioratingValuation breakdown
- Expectation
- Forward P/E stays under 13x.
CounterLow multiples may reflect worries about dealer demand and revenue data issues.
Price is below the 200-day average with its slope down 3.1%, and the death cross is active.
↑ImprovingMomentum breakdown
- Expectation
- Price reclaims the 200-day average.
CounterRSI of 71 suggests a bear rally that could fail.
CarGurus beat EPS in 3 of 3 reported quarters with an average surprise of about 3.2%.
→StableEarnings
- Expectation
- EPS keeps beating consensus.
CounterSurprises are small, and earnings are due in 4 days with high short interest of 22%.
Per-dimension breakdown
Quality
8.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 9.1 |
| Current ratio | 6.6 |
| FCF quality | 9.6 |
| Moat | 8.2 |
| Rule of 40 | 5.5 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 53%
- ▸Strong margins: 18%
- ▸Excellent cash conversion: 137% FCF/NI
- ▸Wide economic moat
Growth
7.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.8 |
| EPS growth | 10.0 |
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 2.4 |
- ▸Overbought (RSI 71)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 7.0 |
| Price target | 7.9 |
- ▸Analyst upside: 22%
Insider
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 6.6 |
| notable moves | 5.0 |
- ▸Modest insider selling — $2,801,831 (0.093% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.4 |
| quality rank | 8.3 |
| growth rank | 3.4 |
- ▸Superior ROE vs peers
Technical
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.5 |
| support resistance | 0.4 |
| 52w position | 6.4 |
Risk (lower is worse)
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.2 |
| days to cover | 4.7 |
| volatility | 2.8 |
| put call | 0.0 |
| implied vol | 0.0 |
| beta | 6.1 |
| debt equity | 6.8 |
- ▸Short squeeze setup: 22% short, quality 7.5
- ▸Elevated put/call: 39.60
- ▸High IV: 85%
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.1 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/0M
- ▸Earnings in 2 days
How the verdict was assembled
Engine trigger
Earnings in 2 days. Wait until post-earnings.
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|EARNINGS:BUY_DEFERRED|ENTRY_STICKY:WITHIN_BANDPassed (6)
- MOMENTUM:7.0>=5.5
- INSIDER:OK
- DEATH_CROSS:QUALITY_MOMENTUM_EXEMPT
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.4<1.5@spot
- EARNINGS_PROXIMITY:2d<=7d
Warning (1)
- DEATH_CROSS:quality=8.9>=7.5+momentum=7.0>=5.0 exempted
Reward-to-Risk
0.42
Upside
+6.3%
Downside
15.0%
Sizing output
STARTER
SetupRecovery — Death cross but MACD improving, RSI 71
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.0B<$5B
Investment implication
The C-path quality+growth combination triggered the STRONG_BUY_WAIT verdict: quality 8.9 and growth 7.9 both clear their thresholds, with asymmetric R:R of 0.42 supporting the read.
The strongest dimensions are Quality at 8.9, Growth at 7.9, and Value at 7.5; the weakest are Technical at 2.4, Risk (lower is worse) at 4.2, and Peer rank at 4.3. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.42 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Compounding
Trip ifNet margin falls below 14% from the current 18%.
- P2Cheap Forward Multiple
Trip ifForward P/E rises above 15x.
- P3Downtrend Technicals
Trip ifPrice stays below the 200-day average with its 30-day slope below -3%.
- P4Earnings Beat Record
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.