Why CarGurus Shares Are Declining Today
Portfolio Pulse from Lekha Gupta
CarGurus, Inc. (NASDAQ:CARG) shares fell after reporting Q4 FY23 results with a 22% Y/Y revenue decline to $223.1 million, though it beat the consensus. U.S. Marketplace revenue rose 9%, while Digital Wholesale revenue dropped 66%. Adjusted gross profit and EBITDA saw significant increases. The company repurchased $99.9 million in shares. Q1 FY24 EPS and revenue forecasts are below consensus estimates. The acquisition of CarOffer aims to expand the digital wholesale market presence.
February 27, 2024 | 3:49 pm
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CarGurus reported a 22% Y/Y revenue decline in Q4 FY23 but beat consensus estimates. Adjusted profits increased, and the company repurchased shares. However, its Q1 FY24 outlook is below market expectations, leading to a 7.2% stock price drop.
CarGurus' stock price decline is directly related to its Q4 FY23 performance and below-consensus Q1 FY24 outlook. Despite beating Q4 revenue estimates and showing profit growth, the disappointing future revenue and EPS guidance likely contributed to negative investor sentiment. The acquisition of CarOffer indicates strategic growth efforts, but immediate market reaction focuses on financials.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100