CarGurus, Inc. (NASDAQ:CARG) Analysts Just Slashed Next Year's Revenue Estimates By 14%
The latest analyst coverage could presage a bad day for CarGurus, Inc. (NASDAQ:CARG), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the downgrade, the most recent consensus for CarGurus from its 13 analysts is for revenues of US$2.0b in 2023 which, if met, would be a sizeable 31% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$2.3b of revenue in 2023. It looks like forecasts have become a fair bit less optimistic on CarGurus, given the measurable cut to revenue estimates.
View our latest analysis for CarGurus
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of CarGurus'historical trends, as the 24% annualised revenue growth to the end of 2023 is roughly in line with the 28% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So although CarGurus is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for next year. They're also forecasting more rapid revenue growth than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of CarGurus going forwards.
Of course, there's always more to the story. We have estimates for CarGurus from its 13 analysts out until 2024, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
