CarGurus (CARG) Valuation Check As New AI Tools And Branding Mark Its Next Phase

CarGurus (CARG) is rolling out a new wave of AI-powered products, including CarGurus Discover, Dealership Mode and PriceVantage, along with updated branding that will be showcased at the 2026 NADA Show.

Check out our latest analysis for CarGurus.

Despite the excitement over its AI-powered tools and its 20th anniversary, CarGurus’ recent stock price performance has been more muted, with a 30-day stock price return decline of 12.01% and a one-year total shareholder return decline of 12.66%, compared to a three-year total shareholder return of 96.99%, suggesting that past momentum may now be slowing.

If you’re following how digital platforms are using AI to reshape industries, now could be a good time to broaden your view with high-growth tech and AI stocks.

With CarGurus shares giving back some of their earlier gains, while trading below analysts’ average price target and reported by some models to be trading at a discount to their intrinsic value, is there still an opportunity for investors here or is the market already pricing in future growth?

Most popular story: 17% undervalued

CarGurus’ most-followed story estimates fair value at around $40.96 compared to the last close of $34.00, highlighting a gap that depends on how its market and data tools perform over time.

Leveraging brand trust, scale and consumer engagement through AI-enhanced personalized shopping experiences and omnichannel dealer integration increases user loyalty and differentiation in a consolidating digital automotive market, supporting long-term growth in revenue, market share and profitability.

Read the full story.

The fair value story relies heavily on earnings growing faster than revenues, expanding margins, and a future earnings multiple that assumes the company matures without losing its edge. The real question is how these moving parts fit together and what needs to happen for that $40.96 figure to hold up.

Result: Fair value of $40.96 (UNDERVALUED)

Read the full story and understand what’s behind the predictions.

However, that depends on CarGurus’ ability to hold its own in the face of growing online competition, including Amazon Autos, and effectively manage the wholesale exit without eroding its growth.

Learn about the main risks in this CarGurus story.

Another view: multiple wins send a different signal

Our DCF model indicates that CarGurus is deeply undervalued at $113.24 per share, up from $34 currently. At the same time, the market values ​​the stock at a P/E of 21.4x, which is higher than both peers at 11.8x and the fair ratio of 22.3x. This raises the question of whether this represents a cushion or a potential warning should sentiment change.

Examine how the SWS DCF model achieves its true value.

Build your own CarGurus story

If you look at the numbers and come to a different conclusion, or simply prefer to test your own hypotheses, you can create a comprehensive view in just a few minutes with Do it your way.

A good place to start is our analysis highlighting 4 key awards that investors are bullish on regarding CarGurus.

Looking for other investment ideas?

If CarGurus makes you think differently about opportunities, don’t stop there. Expand your watchlist with a few targeted screens that feature very different types of actions.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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