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Needham Sees Above 72% Upside In This Conviction List Stock; Here's Why

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  • Needham analyst Chris Pierce anticipated CarGurus, Inc (NASDAQ: CARG) leveraging its industry-leading traffic metrics over the long term to create a compelling end-to-end digital solution for independent brick and mortar car dealerships.

  • CARG would be uniquely positioned as an asset-light operator, operating a take rate vs. a heavy inventory model.

  • In the shorter term, he saw investors more fully appreciate CARG's CarOffer acquisition as a way to play the digital transformation in the used car auction space. He saw it increase their importance to the dealer community and drive higher dealer count via cross-selling and potentially higher revenue per dealer while making them more likely to partner with CARG on a fully digital experience.

  • He thinks CARG's multiple can expand as it shifts from primarily operating a lead-gen model to a fuller product suite helping dealers source buyers, transact digitally, and source and move inventory digitally.

  • Pierce reiterated his Buy rating and $40 price target (72.5% upside) on the Needham Conviction List stock post conversations with 40 dealers across 15 states.

  • Price Action: CARG shares traded higher by 0.73% at $22.69 on the last check Tuesday.

Latest Ratings for CARG

Date

Firm

Action

From

To

Mar 2022

RBC Capital

Maintains

Outperform

Mar 2022

DA Davidson

Maintains

Neutral

Feb 2022

Raymond James

Maintains

Outperform

View More Analyst Ratings for CARG

View the Latest Analyst Ratings

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