NASDAQ:CARG is showing decent growth, but is still valued reasonably.

Last update: Jul 10, 2024

Our stock screener has spotted CARGURUS INC (NASDAQ:CARG) as a growth stock which is not overvalued. NASDAQ:CARG is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Growth Assessment of NASDAQ:CARG

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:CARG has earned a 7 for growth:

CARG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.71%, which is quite impressive.
CARG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 31.95% yearly.
CARG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.02% yearly.
Based on estimates for the next years, CARG will show a very strong growth in Earnings Per Share. The EPS will grow by 31.44% on average per year.
CARG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.19% yearly.

Valuation Examination for NASDAQ:CARG

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:CARG boasts a 5 out of 10:

73.13% of the companies in the same industry are more expensive than CARG, based on the Price/Earnings ratio.
CARG is valuated rather cheaply when we compare the Price/Earnings ratio to 28.45, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio, CARG is valued a bit cheaper than 71.64% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.17, CARG is valued a bit cheaper.
Based on the Enterprise Value to EBITDA ratio, CARG is valued a bit cheaper than 62.69% of the companies in the same industry.
CARG has a very decent profitability rating, which may justify a higher PE ratio.
CARG's earnings are expected to grow with 17.54% in the coming years. This may justify a more expensive valuation.

Looking at the Health

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:CARG, the assigned 9 for health provides valuable insights:

An Altman-Z score of 7.25 indicates that CARG is not in any danger for bankruptcy at the moment.
CARG has a Altman-Z score of 7.25. This is amongst the best in the industry. CARG outperforms 85.07% of its industry peers.
There is no outstanding debt for CARG. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
CARG has a Current Ratio of 2.78. This indicates that CARG is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.78, CARG is doing good in the industry, outperforming 61.19% of the companies in the same industry.
CARG has a Quick Ratio of 2.78. This indicates that CARG is financially healthy and has no problem in meeting its short term obligations.
CARG has a Quick ratio of 2.78. This is in the better half of the industry: CARG outperforms 61.19% of its industry peers.

Profitability Analysis for NASDAQ:CARG

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:CARG, the assigned 6 is noteworthy for profitability:

CARG has a Return On Assets of 4.16%. This is in the better half of the industry: CARG outperforms 73.13% of its industry peers.
The Return On Equity of CARG (6.38%) is better than 73.13% of its industry peers.
With a decent Return On Invested Capital value of 4.69%, CARG is doing good in the industry, outperforming 74.63% of the companies in the same industry.
The last Return On Invested Capital (4.69%) for CARG is well below the 3 year average (9.65%), which needs to be investigated, but indicates that CARG had better years and this may not be a problem.
CARG has a better Profit Margin (4.04%) than 67.16% of its industry peers.
CARG's Operating Margin of 4.99% is fine compared to the rest of the industry. CARG outperforms 67.16% of its industry peers.
Looking at the Gross Margin, with a value of 74.76%, CARG is in the better half of the industry, outperforming 67.16% of the companies in the same industry.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Check the latest full fundamental report of CARG for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.