CARG Should I Buy
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CarGurus Inc (CARG) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company's financial performance is improving, the technical indicators suggest a bearish trend, and there are no immediate positive catalysts or strong trading signals to justify an entry at this time. Holding off for a more favorable entry point or clearer signals is recommended.
The stock is in a bearish trend with the MACD histogram at -0.415 (below 0 and negatively contracting), RSI at 5.091 (oversold), and bearish moving averages (SMA_200 > SMA_20 > SMA_5). Key support is at 26.986, which aligns closely with the current price of 26.96, indicating limited downside potential in the short term but no strong upward momentum.
Strong financial performance in Q3 2025 with YoY increases in revenue (+3.17%), net income (+98.65%), EPS (+114.29%), and gross margin (+6.54%).
Analysts maintain a Buy rating with price targets ranging from $37 to $45, indicating potential upside.
Bearish technical indicators and oversold RSI suggest weak momentum.
No recent news or significant trading trends from hedge funds or insiders.
Concerns around AI disintermediation risk could limit multiple appreciation, as noted by analysts.
In Q3 2025, CarGurus reported strong growth: Revenue increased to $238.7M (+3.17% YoY), Net Income surged to $44.7M (+98.65% YoY), EPS rose to 0.45 (+114.29% YoY), and Gross Margin improved to 87.48% (+6.54% YoY).
Analysts maintain a positive outlook with Buy ratings and price targets ranging from $37 to $45. Recent adjustments reflect cautious optimism, with some concerns around AI adoption risks but confidence in the company's emerging solutions business.
