BOSTON—Zachary Emerson (NYSE: ), CEO of CarOffer, a subsidiary CarGurus Inch. (NASDAQ: ), recently sold part of its stake in the company. According to a Form 4 filing with the Securities and Exchange Commission, Emerson sold 2,203 shares of CarGurus’ Class A Common Stock at an average price of $38.12 per share on Jan. 17, for a total of $83,978. The sale comes as CarGurus is trading near a 52-week high of $39.10, with the stock returning an impressive 62% over the past year. InvestingPro data shows that the company maintains a GOOD financial health rating, with 15+ additional insights available to subscribers.
In a separate transaction on Jan. 16, Emerson had 1,865 shares withheld to cover tax liabilities following the vesting of restricted stock units, valued at $37.65 per share. Following these transactions, Emerson holds 115,983 shares of CarGurus’ Class A common stock.
The sale was made pursuant to a pre-established Rule 10b5-1 trading plan, which allows company persons to set a predetermined schedule for selling shares, providing a degree of separation from the timing of trading and potential insider information.
In other recent news, CarGurus delivered an impressive financial performance, with a 5% year-over-year increase in consolidated revenue to $231 million and a significant 15% increase in market revenue to $204 million. The company’s non-GAAP consolidated adjusted EBITDA also saw a significant year-over-year increase of 33%. Analysts at Needham, B.Riley and RBC Capital Markets raised their price targets for the company, reflecting confidence in CarGurus’ business model and growth potential.
These recent developments show that CarGurus has been successful in capturing the attention and spending of dealer customers compared to its competitors in the used car market, maintaining an impressive 80.76% gross profit margin. The company’s international operations, particularly in Canada, contributed to overall growth with a 23% increase in revenue. CarGurus also announced a $200 million share repurchase program, which is scheduled to begin in January 2025.
Despite forecasting challenging results in 2025, CarGurus remains bullish on its growth drivers and product offerings, forecasting fourth-quarter revenue between $219 million and $239 million, with market revenue growth expected to be between 14% and 17% in compared to the previous year. Needham’s analysis suggests that CarGurus is not taking full advantage of its competitive advantages and will benefit as dealers increasingly rely on data to drive their business. The new target price is based on a 15x multiple of projected adjusted EBITDA, an increase from the 12.5x multiple used previously.
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