CarGurus, Inc. (CARG) Stock: A Technology Stock That’s Seeing Declines


CarGurus, Inc. (CARG) is falling in the market today. The stock, focused on the technology space, is currently priced at $36.47 after heading down -6.31% so far today. As it relates to technology companies, there are several factors that have the ability to generate price movement in the market. News tends to be one of the biggest reasons for the movement. Here are the recent headlines relating to CARG:

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May-10-19 12:23PM CarGurus, Inc. (CARG) Q1 2019 Earnings Call Transcript
May-09-19 08:35PM CarGurus (CARG) Tops Q1 Earnings and Revenue Estimates
07:31PM CarGurus: 1Q Earnings Snapshot
04:40PM CarGurus stock rallies after company’s Q1 profit, sales top views
04:05PM CarGurus Announces First Quarter 2019 Results

Nonetheless, any time investors are making a decision with regard to investing, prospective investors should take a look at far more than news, this is especially the case in the ever evolving tech sector. Here’s what’s happing when it comes to CarGurus, Inc..

What We’ve Seen From CARG

Although a move toward the top in a single session, like what we’re seeing from CarGurus, Inc. may lead to fear in some investors, that alone should not be the reason for a decision to, or not to, invest in a stock. It is generally smart to look at trends experienced by the stock beyond a single session. As it relates to CARG, here are the returns that we have seen:

  • Past 5 Trading Sessions – Over the last week, CARG has produced a change in price amounting to -2.82%.
  • Past 30 Days – The monthly ROI from CarGurus, Inc. has been -5.05%.
  • Past 3 Months – Throughout the last 3 months, the stock has produced a return that works out to -2.33%
  • Past 6 Months – Throughout the last six months, we’ve seen a performance of -6.93% from the stock.
  • Year To Date – Since the the first trading session of this year CARG has generated a return on investment of 15.39%.
  • Full Year – Lastly, in the past full year, we have seen performance of 19.02% from CARG. Throughout this period of time, the stock has traded at a high price of -36.31% and a low of 20.39%.

Ratios To Pay Attention To

Digging into various ratios having to do with a stock can give prospective traders an understanding of just how dangerous and/or rewarding a pick might be. Below are a few of the key ratios to consider when looking at CARG.

Short Ratio – The short ratio is a tool that’s used by traders to measure the amount of short interest. The higher this ratio, the more investors believe that the value of the stock is going to fall. In general, strong technology stocks tend to carry a lower short ratio. On the other hand, we also tend to see quite a few short squeezes in the sector. Nonetheless, with regard to CarGurus, Inc., it’s short ratio clocks in at 7.05.

Quick & Current Ratios – The quick and current ratios are tools that are used to get an idea of the company’s liquidity. Basically, they measure whether or not a company can pay its debts when they come due based on current assets or quick assets. Because in tech, companies are reliant on the continuation of support from investors as they work to bring new technologies to market, the current and quick ratios can be damning. Nonetheless, several better companies in the tech industry do have strong current and quick ratios. When it comes to CARG, the quick and current ratios total up to 2.70 and 2.70 respectively.  

Book To Share Value – The book to share value compares the value of assets owned by the company to the share price of the stock. In this particular case, that ratio works out to 1.90.

Cash To Share Value – Finally, the cash to share value comparison compares the amount of cash the company has on hand to the value of shares. In this case, the cash to share value works out to 1.22.

Is Big Money Interested in CarGurus, Inc.?

An interesting fact that I’ve come to understand so far in my short period here has been that smart investors tend to follow big money. So, investors that want to keep their investments relatively safe will pay close attention to trades made by institutions as well as insiders. So, how does the big money flow in regard to CARG? Here’s what’s happening:

  • Institutions – At the moment, institutions own 90.90% of CarGurus, Inc.. Nonetheless, it is important to mention that institutional ownership has seen a move of 1.81% over the past quarter.
  • Insider Moves – as it relates to insiders, those close to the situation currently hold 8.90% of CarGurus, Inc.. Their ownership of the company has moved 0 in the last quarter.

What Analysts Think About CarGurus, Inc.

Although it’s never a smart idea to blindly follow the thoughts of analysts, it is a smart idea to use their thoughts to validate your own opinions when it comes to making investment decisions in the tech industry. Below are the most recent moves that we’ve seen from analysts when it comes to CARG.

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Mar-18-19 Resumed Goldman Buy $43 → $48
Jan-09-19 Initiated Oppenheimer Outperform $42
Dec-07-18 Initiated Citigroup Buy
Nov-19-18 Initiated SunTrust Buy $49
Aug-08-18 Upgrade RBC Capital Mkts Sector Perform → Outperform

What We’ve Seen In Financial Results

What have ween seen from CARG in terms of financial results?Here’s what you’re looking for:

  • Analyst Expectations – Currently, Wall Street analysts are expecting that CARG will come up with EPS in the amount of 0.57, with 0.07 to be announced in the report for the current quarter. Although this information is not earnings driven, because we’re chatting on the topic of analysts, the stock is currently graded as a 1.80 considering a scale that ranges from 1 to 5 where 1 is the poorest Wall Street analyst rating and 5 is the best.
  • 5-Year Sales – Over the last 5 years, CarGurus, Inc. has announced a change in revenue that adds up to 0. Earnings per diluted share through the last half decade have experienced movement in the amount of 0.
  • Quarter Over Quarter – In terms of quarter over quarter earnings data, or Q/Q data as it is generally explained in the world of humans, CarGurus, Inc. has experienced a earnings change by 128.90%. The company has also moved the needle in terms of revenue that totals 37.20%.

Float Information

Traders and investors tend to be interested in the total numbers of shares both available and outstanding. In terms of CarGurus, Inc., currently there are 112.98M with a float of 60.27M. These numbers mean that of the total of 112.98M shares of CARG in existence today, 60.27M are available to be traded in the public space.

It’s also important to pay attention to the short float. After all, if a high percentage of the float available for trading is sold short, the overall opinion among investors is that the equity is going to fall. When it comes to CARG, the percentage of the float that is shorted currently sits at 10.23%. Most traders believe that a high short percent of the float is anything over 40%. However, I’ve calculated that a short percent of the float over 26% is probably going to be a a play that could prove to be very risky.

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