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CarGurus: CarGurus' Strong 2025 Results and Promising Outlook

CarGurus reported a robust 2025 with revenue growing 14% to $907 million, and adjusted EBITDA increasing 25% to $319 million. The company's earnings per share (EPS) came in at $0.63, beating estimates of $0.61. The strong growth was driven by a significant increase in its dealer base, with the global paying dealer count rising by 2,399. The U.S. QARSD grew 8% year-over-year, while international revenue surged 27% year-over-year, driven by accelerated dealer acquisition and wallet share expansion.

CARG

USD 30.17

3.32%

A-Score: 4.7/10

Publication date: February 19, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Revenue & Profit Growth: 2025 revenue rose 14% to $907M; adjusted EBITDA surged 25% to $319M.
  • Dealer Base Expansion: Global paying dealers increased by 2,399; U.S. QARSD grew 8% YoY, driving revenue.
  • International Momentum: International revenue jumped 27% YoY, fueled by dealer acquisition and wallet share growth.
  • New Product Success: Launches like PriceVantage and CG Discover are projected to hit 8-figure revenue in 2026, scaling 15x YoY.
  • Capital Allocation & Guidance: $250M share buyback program; 2026 revenue growth target of 10–13% amid EBITDA margin compression of 1.5–2.5 pts.

Growth Drivers and New Products

The company's growth was fueled by the launch of new products, including PriceVantage, CG Discover, and Dealership Mode, which have shown promising signs of engagement and scaling. These products are expected to drive growth, with the monetized dealer products launched in 2025 expected to grow approximately 15x in 2026 and achieve 8-figure revenue levels. The company's focus on ROI for customers, lead growth, and new software and data tools has driven retention to a 3-year high.

Outlook and Guidance

For 2026, CarGurus expects revenue growth of 10% to 13% year-over-year and non-GAAP adjusted EBITDA margins to compress approximately 1.5 to 2.5 percentage points. The company's guidance implies continued strong growth, driven by the expansion of its dealer base and the success of its new products. With a current P/E Ratio of 18.44 and an EV/EBITDA of 10.15, the market appears to have priced in a significant level of growth. The company's ROIC of 24.64% and ROE of 39.29% indicate a strong ability to generate returns on invested capital.

Valuation and Capital Allocation

The company's strong financial performance and promising outlook are supported by its solid capital allocation strategy. The newly authorized $250 million share repurchase program highlights the company's commitment to returning value to shareholders. With a P/S Ratio of 3.3 and a Free Cash Flow Yield of 9.06%, the company's valuation appears reasonable, considering its growth prospects and financial performance.

CarGurus's A-Score