CarGurus (CARG) Stock Forecast & Price Target

CarGurus is positioned favorably because its core U.S. Marketplace is still growing at a healthy clip, with Q2 revenue of $251M up 13% y/y and U.S. QARSD up 8%, reflecting stronger add-on adoption, pricing power, and better lead quality. The company’s product cadence is also improving monetization and engagement, as PriceVantage bookings rose 50%+ sequentially, VINMax listings sold 23% faster, and average dealer activity increased 28% y/y, while Guru drove 60% sequential lead growth. Profitability is strengthening too, with adjusted EBITDA of $85M up 7% y/y and management raising its margin outlook on AI-enabled efficiency gains, disciplined execution, and the CarOffer wind-down removing operational drag.

CarGurus is facing a mixed but increasingly fragile fundamental setup, as solid U.S. Marketplace growth is being offset by stalled international dealer count expansion and softer dealer adds amid modest macro pressure, tariff pass-through, and tighter budgets. While FY26 guidance was lifted and EBITDA margin reached about 34%, management also tightened margin compression to 50–150 bps and trimmed FY26 U.S. dealer adds to 342 from 617, signaling slower monetization and less operating leverage than bulls expect. The bear case is reinforced by residual CarOffer integration challenges, slower-than-expected adoption of new products like PriceVantage and New Car Exposure, and persistent AI disintermediation risk that could compress multiples if traffic or dealer engagement weakens.