We assign a fundamental rating of 7 out of 10 to CARG. CARG was compared to 70 industry peers in the Interactive Media & Services industry. CARG gets an excellent profitability rating and is at the same time showing great financial health properties. CARG is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings would make CARG suitable for value and quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year CARG was profitable.
In the past year CARG had a positive cash flow from operations.
Of the past 5 years CARG 4 years were profitable.
In the past 5 years CARG always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 23.01%, CARG belongs to the top of the industry, outperforming 92.86% of the companies in the same industry.
CARG has a Return On Equity of 40.48%. This is amongst the best in the industry. CARG outperforms 98.57% of its industry peers.
The Return On Invested Capital of CARG (23.46%) is better than 88.57% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CARG is significantly below the industry average of 13.70%.
The 3 year average ROIC (8.25%) for CARG is below the current ROIC(23.46%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	23.01%
ROE	40.48%
ROIC	23.46%

ROA(3y)8.94%

ROA(5y)8.45%

ROE(3y)11.77%

ROE(5y)11.21%

ROIC(3y)8.25%

ROIC(5y)10.3%

1.3 Margins

With an excellent Profit Margin value of 16.41%, CARG belongs to the best of the industry, outperforming 82.86% of the companies in the same industry.
CARG's Profit Margin has declined in the last couple of years.
CARG has a Operating Margin of 22.47%. This is amongst the best in the industry. CARG outperforms 87.14% of its industry peers.
CARG's Operating Margin has improved in the last couple of years.
CARG has a better Gross Margin (88.15%) than 88.57% of its industry peers.
In the last couple of years the Gross Margin of CARG has declined.

		Industry Rank	Sector Rank
OM	22.47%
PM (TTM)	16.41%
GM	88.15%

OM growth 3Y4.23%

OM growth 5Y24.82%

PM growth 3YN/A

PM growth 5Y-19.98%

GM growth 3Y6.61%

GM growth 5Y-2.25%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CARG is creating value.
Compared to 1 year ago, CARG has less shares outstanding
CARG has less shares outstanding than it did 5 years ago.
CARG has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

2.2 Solvency

An Altman-Z score of 10.40 indicates that CARG is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 10.40, CARG belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
CARG has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	10.4

ROIC/WACC2.64

WACC8.88%

2.3 Liquidity

A Current Ratio of 2.87 indicates that CARG has no problem at all paying its short term obligations.
CARG has a better Current ratio (2.87) than 74.29% of its industry peers.
CARG has a Quick Ratio of 2.87. This indicates that CARG is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.87, CARG is in the better half of the industry, outperforming 74.29% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.87
Quick Ratio	2.87

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 41.18% over the past year.
CARG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 26.69% yearly.
The Revenue has been growing slightly by 4.21% in the past year.
CARG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.72% yearly.

EPS 1Y (TTM)41.18%

EPS 3Y3.73%

EPS 5Y26.69%

EPS Q2Q%28.89%

Revenue 1Y (TTM)4.21%

Revenue growth 3Y-2.04%

Revenue growth 5Y8.72%

Sales Q2Q%3.17%

3.2 Future

CARG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.55% yearly.
The Revenue is expected to grow by 5.88% on average over the next years.

EPS Next Y30.82%

EPS Next 2Y23.21%

EPS Next 3Y22.11%

EPS Next 5Y21.55%

Revenue Next Year4.3%

Revenue Next 2Y5.21%

Revenue Next 3Y5.96%

Revenue Next 5Y5.88%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 15.74, which indicates a correct valuation of CARG.
72.86% of the companies in the same industry are more expensive than CARG, based on the Price/Earnings ratio.
CARG's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
A Price/Forward Earnings ratio of 12.95 indicates a correct valuation of CARG.
CARG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CARG is cheaper than 68.57% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 24.26. CARG is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	15.74
Fwd PE	12.95

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, CARG is valued a bit cheaper than the industry average as 67.14% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, CARG is valued a bit cheaper than 77.14% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	12.9
EV/EBITDA	13.07

4.3 Compensation for Growth

CARG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of CARG may justify a higher PE ratio.
CARG's earnings are expected to grow with 22.11% in the coming years. This may justify a more expensive valuation.