CarGurus , Inc. (NASDAQ:CARG), a leading online automotive marketplace, has reported a recent transaction by its Chief Technology Officer (CTO), Matthew Todd Quinn. According to the latest SEC filing, Quinn sold a total of 3,495 shares of Class A Common Stock at an average price of $29.43, amounting to approximately $102,857.
The transaction, dated October 2, 2024, was executed under a pre-arranged trading plan in accordance with Rule 10b5-1. This allows company insiders to sell shares at predetermined times to avoid accusations of trading on nonpublic information. Investors often monitor insider transactions as they provide insights into executives' perspectives on the company's current valuation and future prospects.
In addition to the sale, the filing also disclosed that on October 1, Quinn disposed of 8,183 shares at $29.65 each, which were withheld for tax liabilities upon the vesting of restricted stock units. This transaction totaled approximately $242,625.
Following these transactions, Quinn's remaining direct ownership in CarGurus stands at 205,696 shares of Class A Common Stock. It's worth noting that insider sales can occur for various reasons and may not necessarily indicate a negative outlook on the company's future performance.
Investors and analysts often review such filings to understand the behavior of company insiders and to gather potential signals about the company's financial health and the attractiveness of its stock. CarGurus has not provided any official statement regarding the transactions at the time of this report.
In other recent news, CarGurus Inc. has been the focus of several analyst upgrades following a strong quarter. RBC (TSX:RY) Capital Markets has raised its target for the company to $30, maintaining an Outperform rating. This adjustment comes after CarGurus demonstrated robust growth in its core business, improved profit margins, and an increase in dealer revenue. Further, Needham has increased its price target for CarGurus to $27, citing the company's strategy of upselling products and focusing on larger dealerships. BTIG, too, has raised its target to $30, following the company's marketplace revenue surpassing its guidance.
In the second quarter of 2024, CarGurus reported a 9% decrease in consolidated revenue to $219 million, while its marketplace business grew by 14% year-over-year. Despite a non-cash goodwill impairment charge of $127 million related to its CarOffer business, the company remains optimistic about its restructuring efforts. CarGurus anticipates third-quarter consolidated revenue to range from $212 million to $232 million, with marketplace revenue projected between $199 million and $204 million.
These recent developments reflect a positive outlook for CarGurus, with analysts from RBC Capital, Needham, and BTIG expecting further growth and profitability in the company's future.
InvestingPro Insights
To provide additional context to the recent insider transaction at CarGurus, Inc. (NASDAQ:CARG), let's examine some key financial metrics and insights from InvestingPro.
CarGurus' stock has shown impressive performance, with a 72.19% price total return over the past year. This strong momentum is further evidenced by the stock trading at 93.74% of its 52-week high, suggesting investor confidence in the company's prospects.
Despite the CTO's recent sale, which may raise questions among some investors, it's important to note that CarGurus holds more cash than debt on its balance sheet. This financial stability is complemented by liquid assets exceeding short-term obligations, indicating a strong financial position that could support future growth initiatives or weather potential market uncertainties.
The company's revenue for the last twelve months as of Q2 2024 stood at $877.03 million, with a high gross profit margin of 78.67%. This robust margin suggests that CarGurus maintains strong pricing power in the online automotive marketplace sector.
InvestingPro Tips highlight that management has been aggressively buying back shares, which can be seen as a positive signal of the company's confidence in its own stock value. Additionally, analysts predict that CarGurus will be profitable this year, which aligns with the InvestingPro data showing an adjusted P/E ratio of 72.26 for the last twelve months as of Q2 2024.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for CarGurus, providing a deeper understanding of the company's financial health and market position.
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