CarGurus, Inc.

CARG

Consumer CyclicalAuto - DealershipsNASDAQ

$37.41

Market Cap: $3.70B

CarGurus, Inc. (CARG) Valuation Summary

Updated Apr 28, 2026 22:22

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$14.93 – $45.46	$22.04	-40.4%
Growth Exit 10Y	$15.85 – $45.06	$22.76	-38.4%
EBITDA Exit 5Y	$13.78 – $30.49	$21.43	-42.0%
EBITDA Exit 10Y	$14.76 – $31.18	$21.75	-41.1%
▸ Trading Multiples
P/E	$21.51 – $37.11	$39.12	+5.9%
EV/EBITDA	$12.74 – $37.40	$26.01	-29.6%
EV/Revenue	$9.31 – $18.14	$13.72	-62.9%
▸ PEG
PEG Fair Value	$63.00 – $63.00	$63.00	+70.5%
▸ Earnings Power Value
Earnings Power Value	$10.60 – $15.43	$12.57	-66.0%
▸ Dividend Discount
Dividend Discount	—	N/A	—

Valuation History

DCF Analysis

Fair Value

$22.04

Market Price

$37.41

Upside / Downside

-41.1%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CarGurus, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 7.9% to 6.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 27, DPO 65, DIO 7). At a 8.1% WACC with mid-year discounting, the terminal value (77% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $22.04 per share, suggesting CARG is overvalued by 41.1% at the current price of $37.41.

FCFF Present Value Calculation

WACC

8.10%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	128	139	149	161	171	175
(−) Net Interest	20	22	24	25	27	28
(+) D&A	31	35	38	38	31	31
EBITDA	179	196	211	224	229	235

(−) Tax	38	41	44	48	51	52
(−) CapEx	33	36	38	41	44	45
(−) ΔWC	14	2	2	2	2	2
Free Cash Flow (FCFF)	94	117	127	133	132	135

Terminal Value						2,421
WACC / Discount Rate	8.1%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	90	104	104	101	93	1,641

Enterprise Value	2,133
Projection Period	492	23.1%
Terminal Value	1,641	76.9%

(−) Current Net Debt	0

Equity Value	2,133
(/) Outstanding Shares	97

Fair Price	$22.04

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.1%	$28	$31	$34	$39	$45
7.1%	$23	$25	$27	$29	$33
8.1%	$19	$21	$22	$24	$26
9.1%	$17	$18	$19	$20	$21
10.1%	$15	$16	$16	$17	$18

Current price: $37.41. Green = undervalued, Red = overvalued.

Fair Value

$22.76

Market Price

$37.41

Upside / Downside

-39.2%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CarGurus, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 7.9% to 2.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 27, DPO 65, DIO 7). At a 8.1% WACC with mid-year discounting, the terminal value (59% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $22.76 per share, suggesting CARG is overvalued by 39.2% at the current price of $37.41.

FCFF Present Value Calculation

WACC

8.10%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	128	139	149	161	171	171	173	175	178	183	187
(−) Net Interest	20	22	24	25	27	27	27	28	28	29	30
(+) D&A	31	35	38	38	31	38	40	42	43	44	45
EBITDA	179	196	211	224	229	237	241	245	250	256	262

(−) Tax	38	41	44	48	51	51	51	52	53	54	56
(−) CapEx	33	36	38	41	44	44	44	45	45	47	48
(−) ΔWC	14	2	2	2	2	0	0	0	1	1	1
Free Cash Flow (FCFF)	94	117	127	133	132	142	145	148	151	154	158

Terminal Value											2,824
WACC / Discount Rate	8.1%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	90	104	104	101	93	93	87	82	78	74	1,296

Enterprise Value	2,202
Projection Period	906	41.1%
Terminal Value	1,296	58.9%

(−) Current Net Debt	0

Equity Value	2,202
(/) Outstanding Shares	97

Fair Price	$22.76

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.1%	$30	$32	$35	$39	$45
7.1%	$24	$26	$28	$30	$33
8.1%	$21	$22	$23	$24	$26
9.1%	$18	$19	$19	$20	$21
10.1%	$16	$16	$17	$17	$18

Current price: $37.41. Green = undervalued, Red = overvalued.

Fair Value

$21.43

Market Price

$37.41

Upside / Downside

-42.7%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CarGurus, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 7.9% to 6.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 27, DPO 65, DIO 7). At a 8.1% WACC with mid-year discounting, the terminal value (76% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 9.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $21.43 per share, suggesting CARG is overvalued by 42.7% at the current price of $37.41.

FCFF Present Value Calculation

WACC

8.10%

3% – 20%

EV/EBITDA Exit Multiple

9.95x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	128	139	149	161	171	175
(−) Net Interest	20	22	24	25	27	28
(+) D&A	31	35	38	38	31	31
EBITDA	179	196	211	224	229	235

(−) Tax	38	41	44	48	51	—
(−) CapEx	33	36	38	41	44	—
(−) ΔWC	14	2	2	2	2	—
Free Cash Flow (FCF)	94	117	127	133	132	—

Peers' EBITDA Multiple						9.9x
Terminal Value						2,334
WACC / Discount Rate	8.10%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	90	104	104	101	93	1,582

Enterprise Value	2,074
Projection Period	492	23.7%
Terminal Value	1,582	76.3%

(−) Current Net Debt	0
Equity Value	2,073
(÷) Outstanding Shares	97M
Fair Price	$21	-42.7%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	6.0x	8.0x	10.0x	12.0x	14.0x
6.1%	$16	$20	$23	$27	$30
7.1%	$15	$19	$22	$26	$29
8.1%	$15	$18	$21	$25	$28
9.1%	$14	$17	$21	$24	$27
10.1%	$14	$17	$20	$23	$26

Current price: $37.41. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$21.75

Market Price

$37.41

Upside / Downside

-41.9%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CarGurus, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 7.9% to 2.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 27, DPO 65, DIO 7). At a 8.1% WACC with mid-year discounting, the terminal value (57% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 9.9x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $21.75 per share, suggesting CARG is overvalued by 41.9% at the current price of $37.41.

FCFF Present Value Calculation

WACC

8.10%

3% – 20%

EV/EBITDA Exit Multiple

9.95x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	128	139	149	161	171	171	173	175	178	183	187
(−) Net Interest	20	22	24	25	27	27	27	28	28	29	30
(+) D&A	31	35	38	38	31	38	40	42	43	44	45
EBITDA	179	196	211	224	229	237	241	245	250	256	262

(−) Tax	38	41	44	48	51	51	51	52	53	54	—
(−) CapEx	33	36	38	41	44	44	44	45	45	47	—
(−) ΔWC	14	2	2	2	2	0	0	0	1	1	—
Free Cash Flow (FCF)	94	117	127	133	132	142	145	148	151	154	—

Peers' EBITDA Multiple											9.9x
Terminal Value											2,611
WACC / Discount Rate	8.10%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	90	104	104	101	93	93	87	82	78	74	1,199

Enterprise Value	2,105
Projection Period	906	43.0%
Terminal Value	1,199	57.0%

(−) Current Net Debt	0
Equity Value	2,104
(÷) Outstanding Shares	97M
Fair Price	$22	-41.9%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	6.0x	8.0x	10.0x	12.0x	14.0x
6.1%	$19	$22	$25	$28	$31
7.1%	$18	$21	$23	$26	$29
8.1%	$17	$19	$22	$24	$27
9.1%	$16	$18	$20	$23	$25
10.1%	$15	$17	$19	$21	$23

Current price: $37.41. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$39.12

Market Price

$37.41

Upside / Downside

+4.6%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), CarGurus, Inc. (CARG) has a fair value of $39.12 based on 6 comparable companies in the Auto - Dealerships industry.

P/E Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
CarGurus, Inc.CARG	3,620	24.1x	14.8x
Rush Enterprises, Inc.RUSHA	5,794	23.0x	18.6x
Garrett Motion Inc.GTX	3,821	13.3x	18.4x
Red Rock Resorts, Inc.RRR	3,284	17.8x	36.6x
Patrick Industries, Inc.PATK	3,135	24.2x	13.3x
Harley-Davidson, Inc.HOG	2,618	8.4x	6.4x
RhRH	2,504	21.1x	23.0x
Industry Median		19.4x	18.5x
(*) Profit after tax		156	244
Equity Value		3,030	4,540
(/) Outstanding shares		97	97
Fair Price		$31	$47

Selected Fair Value (avg of trailing + forward)

$39.12

+4.6%

Fair Value

$26.01

Market Price

$37.41

Upside / Downside

-30.5%

Verdict

Overvalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), CarGurus, Inc. (CARG) has a fair value of $26.01 based on 6 comparable companies in the Auto - Dealerships industry.

EV/EBITDA Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
CarGurus, Inc.CARG	3,620	15.4x	14.3x
Rush Enterprises, Inc.RUSHA	5,794	15.4x	14.7x
Garrett Motion Inc.GTX	3,821	8.6x	8.9x
Red Rock Resorts, Inc.RRR	3,284	4.0x	4.2x
Patrick Industries, Inc.PATK	3,135	11.3x	12.4x
Harley-Davidson, Inc.HOG	2,618	5.2x	5.6x
RhRH	2,504	16.6x	17.9x
Industry Median		10.0x	10.6x
(*) EBITDA		235	254
= Enterprise Value		2,340	2,694
(-) Net Debt		0	0
Equity Value		2,339	2,694
(/) Outstanding shares		97	97
Fair Price		$24	$28

Selected Fair Value (avg of trailing + forward)

$26.01

-30.5%

Fair Value

$13.72

Market Price

$37.41

Upside / Downside

-63.3%

Verdict

Overvalued

Using the industry peer median EV/Revenue multiple (trailing + forward), CarGurus, Inc. (CARG) has a fair value of $13.72 based on 8 comparable companies in the Auto - Dealerships industry.

EV/Revenue Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
CarGurus, Inc.CARG	3,620	3.9x	3.6x
Rush Enterprises, Inc.RUSHA	5,794	1.0x	0.9x
Garrett Motion Inc.GTX	3,821	1.4x	1.5x
Polaris Inc.PII	3,770	0.7x	0.7x
The RealReal, Inc.REAL	3,413	5.4x	6.2x
Red Rock Resorts, Inc.RRR	3,284	1.6x	1.7x
Patrick Industries, Inc.PATK	3,135	1.2x	1.3x
Harley-Davidson, Inc.HOG	2,618	0.6x	0.6x
RhRH	2,504	1.9x	2.0x
Industry Median		1.3x	1.4x
(*) Revenue		939	1,013
= Enterprise Value		1,239	1,416
(-) Net Debt		0	0
Equity Value		1,239	1,416
(/) Outstanding shares		97	97
Fair Price		$13	$15

Selected Fair Value (avg of trailing + forward)

$13.72

-63.3%

PEG Fair Value

Fair Value

$63.00

Market Price

$37.41

Upside / Downside

+68.4%

Verdict

Undervalued

Using the PEG framework with analyst consensus forward EPS growth of 25.0%, the company has a fair value of $63.00 based on NTM EPS (FY2026) of $2.52. The current PEG ratio is 0.54.

PEG Ratio

0.54Deep Value

01.02.03.0+

PEG = P/E ÷ Growth = 14.7 ÷ 27.3% = 0.54

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Fast GrowerPEG moderately applicable

Growth above 25% is capped — hypergrowth may not be sustainable long-term.

Fair Value Calculation

EPS Growth RateForward	27.3%
Adjusted Growth (clamped 8–25%)Clamped	25.0%
Fair P/E	25.0x
NTM EPS (FY2026)	$2.52
Fair Value	$63.00

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$1.55	—	—
FY2026E	$2.52	+62.6%	10
FY2027E	$3.02	+20.0%	10
FY2028E	$3.56	+17.9%	7
FY2029E	$4.64	+30.2%	3
FY2030E	$5.17	+11.5%	6

5Y Forward EPS CAGR: 27.3%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$109.2M	$-0.00	—
FY2022	$193.8M	$1.51	—
FY2023	$31.1M	$0.19	-87.4%
FY2024	$21.0M	$0.20	+5.3%
FY2025	$155.9M	$1.55	+675.0%

4Y Historical EPS CAGR: 197.6%

Earnings Power Value

Fair Value

$12.57

Market Price

$37.41

Upside / Downside

-66.4%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 8.1% and normalized earnings of $98.5M, the company has a fair value of $12.57 per share. The EPV range is $10.60 – $15.43 based on WACC sensitivity (6.6% – 9.6%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	98	98	98
(/) WACC	9.6%	8.1%	6.6%
Enterprise Value	1,026	1,216	1,493
(-) Net debt	0	0	0
Equity Value	1,026	1,216	1,493
(/) Outstanding shares	97	97	97
Fair Price	$10.60	$12.57	$15.43

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

CarGurus, Inc. (CARG) Valuation Summary

Updated Apr 28, 2026 22:22

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$14.93 – $45.46	$22.04	-40.4%
Growth Exit 10Y	$15.85 – $45.06	$22.76	-38.4%
EBITDA Exit 5Y	$13.78 – $30.49	$21.43	-42.0%
EBITDA Exit 10Y	$14.76 – $31.18	$21.75	-41.1%
▸ Trading Multiples
P/E	$21.51 – $37.11	$39.12	+5.9%
EV/EBITDA	$12.74 – $37.40	$26.01	-29.6%
EV/Revenue	$9.31 – $18.14	$13.72	-62.9%
▸ PEG
PEG Fair Value	$63.00 – $63.00	$63.00	+70.5%
▸ Earnings Power Value
Earnings Power Value	$10.60 – $15.43	$12.57	-66.0%
▸ Dividend Discount
Dividend Discount	—	N/A	—

Valuation History

DCF Analysis

Fair Value

$22.04

Market Price

$37.41

Upside / Downside

-41.1%

Verdict

Overvalued

FCFF Present Value Calculation

WACC

8.10%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	128	139	149	161	171	175
(−) Net Interest	20	22	24	25	27	28
(+) D&A	31	35	38	38	31	31
EBITDA	179	196	211	224	229	235

(−) Tax	38	41	44	48	51	52
(−) CapEx	33	36	38	41	44	45
(−) ΔWC	14	2	2	2	2	2
Free Cash Flow (FCFF)	94	117	127	133	132	135

Terminal Value						2,421
WACC / Discount Rate	8.1%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	90	104	104	101	93	1,641

Enterprise Value	2,133
Projection Period	492	23.1%
Terminal Value	1,641	76.9%

(−) Current Net Debt	0

Equity Value	2,133
(/) Outstanding Shares	97

Fair Price	$22.04

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.1%	$28	$31	$34	$39	$45
7.1%	$23	$25	$27	$29	$33
8.1%	$19	$21	$22	$24	$26
9.1%	$17	$18	$19	$20	$21
10.1%	$15	$16	$16	$17	$18

Current price: $37.41. Green = undervalued, Red = overvalued.

Fair Value

$22.76

Market Price

$37.41

Upside / Downside

-39.2%

Verdict

Overvalued

FCFF Present Value Calculation

WACC

8.10%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	128	139	149	161	171	171	173	175	178	183	187
(−) Net Interest	20	22	24	25	27	27	27	28	28	29	30
(+) D&A	31	35	38	38	31	38	40	42	43	44	45
EBITDA	179	196	211	224	229	237	241	245	250	256	262

(−) Tax	38	41	44	48	51	51	51	52	53	54	56
(−) CapEx	33	36	38	41	44	44	44	45	45	47	48
(−) ΔWC	14	2	2	2	2	0	0	0	1	1	1
Free Cash Flow (FCFF)	94	117	127	133	132	142	145	148	151	154	158

Terminal Value											2,824
WACC / Discount Rate	8.1%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	90	104	104	101	93	93	87	82	78	74	1,296

Enterprise Value	2,202
Projection Period	906	41.1%
Terminal Value	1,296	58.9%

(−) Current Net Debt	0

Equity Value	2,202
(/) Outstanding Shares	97

Fair Price	$22.76

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.1%	$30	$32	$35	$39	$45
7.1%	$24	$26	$28	$30	$33
8.1%	$21	$22	$23	$24	$26
9.1%	$18	$19	$19	$20	$21
10.1%	$16	$16	$17	$17	$18

Current price: $37.41. Green = undervalued, Red = overvalued.

Fair Value

$21.43

Market Price

$37.41

Upside / Downside

-42.7%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CarGurus, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 7.9% to 6.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 27, DPO 65, DIO 7). At a 8.1% WACC with mid-year discounting, the terminal value (76% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 9.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $21.43 per share, suggesting CARG is overvalued by 42.7% at the current price of $37.41.

FCFF Present Value Calculation

WACC

8.10%

3% – 20%

EV/EBITDA Exit Multiple

9.95x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	128	139	149	161	171	175
(−) Net Interest	20	22	24	25	27	28
(+) D&A	31	35	38	38	31	31
EBITDA	179	196	211	224	229	235

(−) Tax	38	41	44	48	51	—
(−) CapEx	33	36	38	41	44	—
(−) ΔWC	14	2	2	2	2	—
Free Cash Flow (FCF)	94	117	127	133	132	—

Peers' EBITDA Multiple						9.9x
Terminal Value						2,334
WACC / Discount Rate	8.10%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	90	104	104	101	93	1,582

Enterprise Value	2,074
Projection Period	492	23.7%
Terminal Value	1,582	76.3%

(−) Current Net Debt	0
Equity Value	2,073
(÷) Outstanding Shares	97M
Fair Price	$21	-42.7%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	6.0x	8.0x	10.0x	12.0x	14.0x
6.1%	$16	$20	$23	$27	$30
7.1%	$15	$19	$22	$26	$29
8.1%	$15	$18	$21	$25	$28
9.1%	$14	$17	$21	$24	$27
10.1%	$14	$17	$20	$23	$26

Current price: $37.41. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$21.75

Market Price

$37.41

Upside / Downside

-41.9%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CarGurus, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 7.9% to 2.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 27, DPO 65, DIO 7). At a 8.1% WACC with mid-year discounting, the terminal value (57% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 9.9x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $21.75 per share, suggesting CARG is overvalued by 41.9% at the current price of $37.41.

FCFF Present Value Calculation

WACC

8.10%

3% – 20%

EV/EBITDA Exit Multiple

9.95x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	128	139	149	161	171	171	173	175	178	183	187
(−) Net Interest	20	22	24	25	27	27	27	28	28	29	30
(+) D&A	31	35	38	38	31	38	40	42	43	44	45
EBITDA	179	196	211	224	229	237	241	245	250	256	262

(−) Tax	38	41	44	48	51	51	51	52	53	54	—
(−) CapEx	33	36	38	41	44	44	44	45	45	47	—
(−) ΔWC	14	2	2	2	2	0	0	0	1	1	—
Free Cash Flow (FCF)	94	117	127	133	132	142	145	148	151	154	—

Peers' EBITDA Multiple											9.9x
Terminal Value											2,611
WACC / Discount Rate	8.10%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	90	104	104	101	93	93	87	82	78	74	1,199

Enterprise Value	2,105
Projection Period	906	43.0%
Terminal Value	1,199	57.0%

(−) Current Net Debt	0
Equity Value	2,104
(÷) Outstanding Shares	97M
Fair Price	$22	-41.9%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	6.0x	8.0x	10.0x	12.0x	14.0x
6.1%	$19	$22	$25	$28	$31
7.1%	$18	$21	$23	$26	$29
8.1%	$17	$19	$22	$24	$27
9.1%	$16	$18	$20	$23	$25
10.1%	$15	$17	$19	$21	$23

Current price: $37.41. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$39.12

Market Price

$37.41

Upside / Downside

+4.6%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), CarGurus, Inc. (CARG) has a fair value of $39.12 based on 6 comparable companies in the Auto - Dealerships industry.

P/E Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
CarGurus, Inc.CARG	3,620	24.1x	14.8x
Rush Enterprises, Inc.RUSHA	5,794	23.0x	18.6x
Garrett Motion Inc.GTX	3,821	13.3x	18.4x
Red Rock Resorts, Inc.RRR	3,284	17.8x	36.6x
Patrick Industries, Inc.PATK	3,135	24.2x	13.3x
Harley-Davidson, Inc.HOG	2,618	8.4x	6.4x
RhRH	2,504	21.1x	23.0x
Industry Median		19.4x	18.5x
(*) Profit after tax		156	244
Equity Value		3,030	4,540
(/) Outstanding shares		97	97
Fair Price		$31	$47

Selected Fair Value (avg of trailing + forward)

$39.12

+4.6%

Fair Value

$26.01

Market Price

$37.41

Upside / Downside

-30.5%

Verdict

Overvalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), CarGurus, Inc. (CARG) has a fair value of $26.01 based on 6 comparable companies in the Auto - Dealerships industry.

EV/EBITDA Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
CarGurus, Inc.CARG	3,620	15.4x	14.3x
Rush Enterprises, Inc.RUSHA	5,794	15.4x	14.7x
Garrett Motion Inc.GTX	3,821	8.6x	8.9x
Red Rock Resorts, Inc.RRR	3,284	4.0x	4.2x
Patrick Industries, Inc.PATK	3,135	11.3x	12.4x
Harley-Davidson, Inc.HOG	2,618	5.2x	5.6x
RhRH	2,504	16.6x	17.9x
Industry Median		10.0x	10.6x
(*) EBITDA		235	254
= Enterprise Value		2,340	2,694
(-) Net Debt		0	0
Equity Value		2,339	2,694
(/) Outstanding shares		97	97
Fair Price		$24	$28

Selected Fair Value (avg of trailing + forward)

$26.01

-30.5%

Fair Value

$13.72

Market Price

$37.41

Upside / Downside

-63.3%

Verdict

Overvalued

Using the industry peer median EV/Revenue multiple (trailing + forward), CarGurus, Inc. (CARG) has a fair value of $13.72 based on 8 comparable companies in the Auto - Dealerships industry.

EV/Revenue Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
CarGurus, Inc.CARG	3,620	3.9x	3.6x
Rush Enterprises, Inc.RUSHA	5,794	1.0x	0.9x
Garrett Motion Inc.GTX	3,821	1.4x	1.5x
Polaris Inc.PII	3,770	0.7x	0.7x
The RealReal, Inc.REAL	3,413	5.4x	6.2x
Red Rock Resorts, Inc.RRR	3,284	1.6x	1.7x
Patrick Industries, Inc.PATK	3,135	1.2x	1.3x
Harley-Davidson, Inc.HOG	2,618	0.6x	0.6x
RhRH	2,504	1.9x	2.0x
Industry Median		1.3x	1.4x
(*) Revenue		939	1,013
= Enterprise Value		1,239	1,416
(-) Net Debt		0	0
Equity Value		1,239	1,416
(/) Outstanding shares		97	97
Fair Price		$13	$15

Selected Fair Value (avg of trailing + forward)

$13.72

-63.3%

PEG Fair Value

Fair Value

$63.00

Market Price

$37.41

Upside / Downside

+68.4%

Verdict

Undervalued

Using the PEG framework with analyst consensus forward EPS growth of 25.0%, the company has a fair value of $63.00 based on NTM EPS (FY2026) of $2.52. The current PEG ratio is 0.54.

PEG Ratio

0.54Deep Value

01.02.03.0+

PEG = P/E ÷ Growth = 14.7 ÷ 27.3% = 0.54

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Fast GrowerPEG moderately applicable

Growth above 25% is capped — hypergrowth may not be sustainable long-term.

Fair Value Calculation

EPS Growth RateForward	27.3%
Adjusted Growth (clamped 8–25%)Clamped	25.0%
Fair P/E	25.0x
NTM EPS (FY2026)	$2.52
Fair Value	$63.00

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$1.55	—	—
FY2026E	$2.52	+62.6%	10
FY2027E	$3.02	+20.0%	10
FY2028E	$3.56	+17.9%	7
FY2029E	$4.64	+30.2%	3
FY2030E	$5.17	+11.5%	6

5Y Forward EPS CAGR: 27.3%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$109.2M	$-0.00	—
FY2022	$193.8M	$1.51	—
FY2023	$31.1M	$0.19	-87.4%
FY2024	$21.0M	$0.20	+5.3%
FY2025	$155.9M	$1.55	+675.0%

4Y Historical EPS CAGR: 197.6%

Earnings Power Value

Fair Value

$12.57

Market Price

$37.41

Upside / Downside

-66.4%

Verdict

Overvalued

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	98	98	98
(/) WACC	9.6%	8.1%	6.6%
Enterprise Value	1,026	1,216	1,493
(-) Net debt	0	0	0
Equity Value	1,026	1,216	1,493
(/) Outstanding shares	97	97	97
Fair Price	$10.60	$12.57	$15.43