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CARG

9/9 Score

CarGurus, Inc.

Analysis Date: February 21, 2026

CarGurus, Inc. operates an online automotive platform for buying and selling vehicles in the United States and internationally. It operates through two segments, U.S. Marketplace and Digital Wholesale. The company provides an online automotive marketplace that allows customers to search for new and used car listings from its dealers; and connects dealers to a large audience of informed and engaged consumers while providing dealers with actionable data-based insights. It also offers Digital Deal which allows shoppers to start purchase from a VDP on eligible listings that provides them with purchase options; Finance in Advance, where eligible consumers can pre-qualify for financing on cars from dealerships that offer financing from partners; Sell My Car – Top Dealer Offers which allows dealers to make tailored trade-in offers; and Sell My Car – Instant Max Cash Offer which allows consumers to sell vehicles to dealers online. In addition, the company provides dealer listings and data insights products; auto manufacturers and others advertiser products, such as brand reinforcement, category sponsorship, automobile segment exclusivity, and consumer segment exposure; Autolist, an online automotive marketplace through mobile applications and a website; and PistonHeads which is an automotive marketplace, auction platform, and editorial site for automotive enthusiasts. The company was formerly known as CarGurus LLC and changed its name to CarGurus, Inc. in June 2015. CarGurus, Inc. was founded in 2005 and is headquartered in Boston, Massachusetts.

Buffettology Criteria

All 9 of 9 criteria passed

  • High ROE

    Return on Equity > 12%

    Value: 39.3%

  • High ROIC

    Return on Invested Capital > 9%

    Value: 35.5%

  • Cash Machine

    FCF / Assets > 5%

    Value: 43.6%

  • Fair Valuation

    Earnings Yield > 3.5%

    Value: 5.4%

  • Share Buybacks

    Share Count is Dropping

    Value: -5.5%

  • Defensible Moat

    Gross Profit Margin > 40%

    Value: 92.8%

  • Simple Business

    Not in a speculative sector (e.g., Biotech)

    Value: Consumer Cyclical

  • Conservative Debt

    Debt to Equity < 1.5

    Value: 0.51x

  • Consistent Growth

    5-Year Growth is Positive

    Value: 129.5%

Analysis Summary

This company, CARG, certainly catches my eye with an impressive nine out of nine criteria met. The sky-high ROE and ROIC signal a business that's wonderfully efficient at using its capital, and the low debt-to-equity ratio provides a comfortable margin of safety. While the market might not be fully appreciating this gem, I'm always patient for a business with a strong moat and solid financials to present itself.

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