CarGurus (CARG) Stock Forecast & Price Target

CarGurus is benefiting from durable marketplace leadership, with U.S. monthly unique visitors up 11% year over year to 37.8MM and revenue of $251M in Q2, up 13% year over year, supported by stronger traffic, higher lead quality, and growing dealer wallet share. Profitability is also improving as adjusted EBITDA reached $85M, margins were roughly 34%, and management raised its 2026 margin outlook, reflecting AI-driven productivity gains, tighter go-to-market execution, and operating leverage. New products like PriceVantage and VINMax are gaining traction, while the completion of the CarOffer wind-down and a strong balance sheet leave the company focused on core marketplace growth and incremental monetization.

CarGurus is facing fundamental pressure from its FTC-driven pricing transparency rollout, which increased dealer upheaval and left some dealers with low price-analysis compliance, weak lead volumes, and a conversion hit as consumers perceived cars to be more expensive. Despite completing the CarOffer wind-down, residual technology integration issues are delaying expected inventory-product gains, while new monetization efforts like Price Vantage and New Car Exposure are seeing slower adoption amid used-car market weakness, tariff pass-through, and affordability constraints that suppress dealer profitability and transaction volumes. The bearish case is further reinforced by macro risks such as lower 3Q guidance, possible churn from demand weakness, and AI disintermediation concerns, all of which could pressure topline growth and multiple expansion.