CarGurus (CARG)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cost of revenue (ttm)	US$ in thousands	160,464	186,003	192,317	229,432	262,788	357,402	577,950	825,732	997,482	1,007,387	791,751	518,690	294,015	145,862	95,591	55,154	42,706	41,812	41,442	40,190
Inventory	US$ in thousands	338	345	459	391	331	323	541	1,637	5,282	28,166	21,684	20,992	19,656	6,395	—	—	0	17,525	21,189	29,084
Inventory turnover		474.75	539.14	418.99	586.78	793.92	1,106.51	1,068.30	504.42	188.85	35.77	36.51	24.71	14.96	22.81	—	—	—	2.39	1.96	1.38

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $160,464K ÷ $338K
= 474.75

CarGurus' inventory turnover has experienced significant fluctuations over the past few years, indicating varying efficiency in managing its inventory levels. The inventory turnover ratio measures how many times a company sells and replaces its inventory within a specific period.

From March 31, 2020, to June 30, 2021, the inventory turnover ratio remained relatively low, ranging from 1.38 to 2.39. This suggests that CarGurus was not efficiently turning over its inventory during this period. However, starting from September 30, 2021, the inventory turnover ratio saw a substantial increase, reaching as high as 188.85 by December 31, 2022. This sudden surge indicates a significant improvement in inventory management, with the company selling and replacing its inventory almost 189 times within that year.

The inventory turnover ratio continued to be exceptionally high throughout 2023 and the first half of 2024, peaking at 1,106.51 on September 30, 2023, and gradually decreasing but remaining relatively high by December 31, 2024, at 474.75.

Overall, CarGurus has shown a dynamic trend in its inventory turnover, with a period of low efficiency followed by a remarkable improvement in managing and selling its inventory at a much faster rate. However, the company should continue monitoring and optimizing its inventory turnover to ensure balanced inventory levels and efficient operations.