BOSTON—Zachary Emerson (NYSE:EMR), CEO of CarOffer, a subsidiary of CarGurus , Inc. (NASDAQ:CARG), recently sold a portion of his holdings 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 on January 17 at an average price of $38.12 per share, totaling $83,978. The sale comes as CarGurus trades near its 52-week high of $39.10, with the stock delivering an impressive 62% return over the past year. InvestingPro data shows the company maintains a GOOD financial health score, with 15+ additional insights available to subscribers.
In a separate transaction on January 16, Emerson had 1,865 shares withheld to cover tax liabilities upon 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 conducted under a pre-established Rule 10b5-1 trading plan, which allows company insiders to set up a predetermined schedule for selling stocks, providing a degree of separation from the timing of trades and potential insider information.
In other recent news, CarGurus has shown impressive financial performance, with a 5% year-over-year increase in consolidated revenue to $231 million and a notable 15% growth in marketplace revenue, reaching $204 million. The company's non-GAAP consolidated adjusted EBITDA also saw a substantial rise of 33% year-over-year. Analysts from Needham, B.Riley, and RBC Capital Markets have all increased their price targets for the company, reflecting confidence in CarGurus' business model and growth potential.
These recent developments indicate that CarGurus has been successful in gaining the attention and spending of dealer customers compared to its competitors in the used auto marketplace, maintaining an impressive 80.76% gross profit margin. The company's international business, particularly in Canada, contributed to the overall growth with a 23% revenue increase. CarGurus also announced a $200 million share repurchase program, set to commence in January 2025.
Despite anticipating challenging results in 2025, CarGurus remains optimistic about its growth drivers and product offerings, anticipating a fourth-quarter revenue between $219 million and $239 million, with marketplace revenue growth expected to be between 14% and 17% year-over-year. Needham's analysis suggests that CarGurus is not fully capitalizing on its competitive advantages and stands to benefit as dealers increasingly rely on data to drive their businesses. The new price target is based on a 15x multiple of the projected adjusted EBITDA, an increase from the 12.5x multiple used before.
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