What Happened?
Shares of online auto marketplace CarGurus (NASDAQ:CARG) jumped 4.6% in the afternoon session after the company launched PriceVantage, an AI-powered pricing tool for used vehicles. The solution used real-time consumer demand data from the company's automotive shopping platform to provide predictive pricing guidance. The goal was to give dealers a competitive edge by helping them sell cars faster and increase their profits. According to the announcement, dealers who used the PriceVantage recommendations saw a 71% average increase in daily shopper connections. Furthermore, the most engaged dealers achieved sale times that were five times faster than their main competitors on the CarGurus platform.
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What Is The Market Telling Us
CarGurus’s shares are not very volatile and have only had 9 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 29 days ago when the stock gained 7.3% on the news that 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%.
CarGurus is up 4.2% since the beginning of the year, and at $37.23 per share, it is trading close to 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 $1,532.
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