What Happened:
Shares of online auto marketplace CarGurus (NASDAQ:CARG) jumped 9.04% in the after-market session after the company reported first quarter results that exceeded analysts' estimates for revenue, adjusted EBITDA, free cash flow, and earnings per share (EPS). Additionally, revenue, adjusted EBITDA and EPS guidance for the next quarter were above Consensus. The company's guidance is highly reassuring in light of a choppy auto market dealing with normalization of demand post-COVID and potential lending headwinds challenges due to the recent and potentially growing banking crisis.
What is the market telling us:
CarGurus's shares are somewhat volatile and over the last year have had 23 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
CarGurus is up 33.1% since the beginning of the year, but at $19.19 per share it is still trading 27.4% below its 52-week high of $26.45 from June 2022. Investors who bought $1,000 worth of CarGurus's shares 5 years ago would now be looking at an investment worth $573.66.
Is now the time to buy CarGurus? Access our full analysis of the earnings results here, it's free.