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CarGurus had a better quarter, but all eyes focus on weaker guidance

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CarGurus Inc. shares fell 10% in the extended session Monday after investors looked past a better-than-expected quarter for the online car-selling platform to zero in on weaker current-quarter guidance.

CarGurus
CARG,
+0.21%

lost $23.7 million, or 21 cents a share, in the fourth quarter, contrasting with gains of $159 million, or 20 cents a share, in the year-ago period.

Adjusted for one-time items, the company earned 35 cents a share. Revenue fell 22% to $223.1 million.

Analysts polled by FactSet expected the company to report earnings of 34 cents a share on sales of $220.1 million.

CarGurus guided for first-quarter total revenue between $201 million and $221 million, lower than the FactSet consensus of revenue around $240 million. Likewise, it called for an adjusted EPS between 24 cents and 29 cents, in contrast with expectations of 31 cents a share, according to FactSet.

“Looking ahead to 2024, we will continue to invest in growth initiatives while maintaining financial discipline and prioritizing operational excellence and efficient capital allocation,” Chief Executive Jason Trevisan said in a statement.

CarGurus’ results came on the heels of quarterly results for Carvana Inc.
CVNA,
+0.94%
,
which also sells used cars online. Carvana offers used and new cars as well as ways for consumers to research cars they might be interested in.

Carvana reported a narrower quarterly loss than Wall Street expected and said it was on track for growth this year despite macroeconomic conditions.

Shares of CarGurus are up 40% in the past 12 months, compared with an advance of about 28% for the S&P 500 index
SPX.

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