What Happened?
Shares of online auto marketplace CarGurus (NASDAQ: CARG) jumped 7.3% in the afternoon session after the stock's positive momentum continued as the company reported third-quarter 2025 earnings that beat analyst expectations. CarGurus posted earnings per share of $0.57, which was ahead of the $0.55 forecast. Revenue for the quarter also came in higher than anticipated at $239 million, compared to the expected $234.78 million. The solid performance was driven by a 14% year-over-year increase in its marketplace revenue, contributing to a 3% rise in total company sales. Furthermore, the company's profitability showed significant improvement, with adjusted EBITDA surging by 21%.
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What Is The Market Telling Us
CarGurus’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 1.4% on the news that the company reported third-quarter 2025 financial results that beat Wall Street's expectations for both revenue and profit. The online auto marketplace announced revenue of $238.7 million, up 3.2% year over year, which surpassed analysts' projections. Its adjusted earnings per share of $0.57 also came in ahead of consensus estimates. The company's performance was supported by a 6.3% year-over-year increase in paying dealers, a key metric for the marketplace. Adding to the positive sentiment, CarGurus provided an optimistic outlook for the upcoming quarter, with its guidance for revenue, adjusted earnings per share, and EBITDA all exceeding Wall Street's forecasts.
CarGurus is flat since the beginning of the year, and at $35.63 per share, it is trading 12.1% below its 52-week high of $40.55 from January 2025. Investors who bought $1,000 worth of CarGurus’s shares 5 years ago would now be looking at an investment worth $1,579.
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