What To Expect From CarGurus’s (CARG) Q3 Earnings

Online auto marketplace CarGurus (NASDAQ:CARG) will be reporting results tomorrow afternoon. Here’s what to look for.

CarGurus beat analysts’ revenue expectations by 1.4% last quarter, reporting revenues of $218.7 million, down 8.8% year on year. It was a satisfactory quarter for the company, with an impressive beat of analysts’ EBITDA estimates but slow revenue growth. It reported 31,352 users, flat year on year.

Is CarGurus a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting CarGurus’s revenue to grow 1.9% year on year to $223.5 million, a reversal from the 48.5% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.43 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. CarGurus has missed Wall Street’s revenue estimates twice over the last two years.

Looking at CarGurus’s peers in the online marketplace segment, some have already reported their Q3 results, giving us a hint as to what we can expect. EverQuote delivered year-on-year revenue growth of 163%, beating analysts’ expectations by 3%, and Shutterstock reported revenues up 7.4%, topping estimates by 4.1%. EverQuote traded up 3.9% following the results while Shutterstock was also up 12.1%.

Read our full analysis of EverQuote’s results here and Shutterstock’s results here.

There has been positive sentiment among investors in the online marketplace segment, with share prices up 8.6% on average over the last month. CarGurus is up 5.1% during the same time and is heading into earnings with an average analyst price target of $30.35 (compared to the current share price of $31.75).

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