CarGurus Upgrade to Buy: Equity Story Now Cleaner and Better

CarGurus (NASDAQ:CARG) has been upgraded to a "Buy" rating due to a cleaner and better equity story. The previous valuation had already priced in the upside over the next two years, making a hold rating appropriate at the time. The company's recent performance and prospects have improved, warranting an upgrade to a "Buy" rating.

CarGurus (NASDAQ:CARG) has been upgraded to a "Buy" rating by UBS Group, reflecting a cleaner and better equity story. The previous valuation had already priced in the upside over the next two years, making a hold rating appropriate at the time. However, recent performance and prospects have improved, warranting this upgrade.

UBS Group raised its target price for CarGurus from $33.00 to $36.00, indicating a potential upside of 20.81% from the stock's previous close [1]. This upgrade follows a series of positive developments for the company, including strong revenue growth and expanding profitability.

CarGurus reported double-digit year-over-year revenue growth and expanding profitability in its U.S. and International Marketplace businesses during the second quarter of 2025 [2]. The company also highlighted its successful addition of 1,743 net new dealers globally and the decision to wind down the CarOffer transactions business. These strategic moves have positioned CarGurus for continued growth and profitability.

The company's international business sustained outstanding revenue growth, up 28% year-over-year, with momentum in both Canada and the U.K. Additionally, CarGurus has launched new products like New Car Advantage, which has shown early success in increasing vehicle display page (VDP) views and new car leads.

UBS Group's upgrade reflects confidence in CarGurus' strategic direction and financial performance. The company's share repurchase authorization has also been increased by $150 million, demonstrating a commitment to returning capital to shareholders.

Analysts from other firms have also commented on CarGurus' stock. Citigroup lowered their target price from $40.00 to $37.00 but maintained a neutral rating [1]. JMP Securities restated a "market perform" rating and set a $38.00 price target [1]. Gordon Haskett set a "hold" rating and a $35.00 price objective [1]. Needham & Company LLC raised their price target from $39.00 to $44.00 and gave the stock a "buy" rating [1].

CarGurus' stock has experienced volatility, trading down $1.61 during trading hours on Friday, reaching $29.80 [1]. However, the company's strong financial performance and strategic moves have positioned it for continued growth and profitability.

References:
[1] https://www.marketbeat.com/instant-alerts/cargurus-nasdaqcarg-stock-price-expected-to-rise-ubs-group-analyst-says-2025-08-08/
[2] https://seekingalpha.com/news/4482867-cargurus-outlines-marketplace-revenue-growth-of-up-to-14-percent-for-q3-2025-as-company-winds