CarGurus: Fast Growing Online Car Auction Platform

Nov. 08, 2021 1:13 AM ETCarGurus, Inc. (CARG) StockCARG7 Comments
Cappuccino Finance
3.24K Followers

Summary

  • CARG is a global, online marketplace that connects buyers and sellers of new and used cars.
  • Their revenue has been growing rapidly in the past 5 years (5 year average of 43.2%).
  • Their cash from operation is accelerating. It increased from $12.9 M in 2015 to $203 M in 2021.
  • CARG has strong balance sheet with negative net debt (-$193 M) with high liquidity (current ratio of 3.75x).
  • I expect 15-25% upside from the current level.

Aerial image of new cars for sale, United States of America

Abstract Aerial Art/DigitalVision via Getty Images

Investment Thesis

CarGurus (NASDAQ:CARG) is a global, online automotive marketplace that connects buyers and sellers of new and used cars. I believe they present a great investment opportunity for a growth-oriented investor because:

  1. Their

This article was written by

3.24K Followers
I believe in fundamental analysis and disciplined market research. I have strong quant background with a Ph.D. (Chemical Engineering, University of California, Santa Barbara) in model predictive control and an MBA (Jones School of Business, Rice University). My primary focus is to identify 1) small cap companies with strong fundamentals and growth potential, 2) large cap companies going through temporary set-backs, and 3) stable companies with solid dividend yields and growth potential.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of CARG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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