CarGurus (CARG)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 71.09% | 39.69% | 69.09% | 92.26% | 93.73% |
| Operating profit margin | 3.56% | 6.55% | 15.58% | 17.73% | 5.82% |
| Pretax margin | 7.27% | 7.05% | 15.58% | 17.97% | 6.56% |
| Net profit margin | 4.03% | 5.09% | 11.48% | 14.06% | 7.15% |
CarGurus Inc's profitability ratios show a fluctuating trend over the past five years. The gross profit margin has varied significantly, from a high of 93.84% in 2019 to a low of 39.73% in 2022, indicating volatility in the company's ability to generate profits from sales after deducting the cost of goods sold.
The operating profit margin has also shown some inconsistency, with a peak of 17.73% in 2020 and a low of 3.57% in 2023. This metric assesses the company's efficiency in generating profits from its core operations, suggesting some variability in CarGurus Inc's operational performance.
The pretax margin, which indicates the company's profitability before accounting for taxes, has similarly fluctuated over the years, with the highest value of 17.97% in 2020 and the lowest of 5.65% in 2023. This suggests that CarGurus Inc's pre-tax profitability has been impacted by various factors over the years.
The net profit margin, a key metric reflecting the company's bottom-line profitability after all expenses have been accounted for, has also been inconsistent. While it reached a high of 14.06% in 2020, it dropped to -0.02% in 2021 before rebounding to 11.71% in 2022 and then declining to 3.40% in 2023. This suggests that CarGurus Inc has faced challenges in effectively managing its expenses and achieving sustained profitability in recent years.
Overall, CarGurus Inc's profitability ratios exhibit fluctuating performance, indicating potential challenges in maintaining stable and consistent profitability levels over the analyzed period. Investors and analysts may need to further investigate the company's financial health and strategical decisions to assess its future profitability prospects.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.55% | 11.70% | 15.92% | 19.46% | 8.72% |
| Return on assets (ROA) | 4.02% | 9.10% | 11.73% | 15.44% | 10.71% |
| Return on total capital | 5.29% | 14.77% | 28.69% | 26.17% | 13.36% |
| Return on equity (ROE) | 5.99% | 11.49% | 21.14% | 20.76% | 16.41% |
CarGurus Inc's profitability ratios show fluctuations over the past five years.
Operating return on assets (Operating ROA):
- CarGurus Inc's Operating ROA has declined consistently from 2019 to 2023, indicating a decrease in profitability generated from its assets. This could be a concerning trend as it suggests a potential inefficiency in utilizing the company's resources to generate operating profits.
Return on assets (ROA):
- The ROA ratio fluctuated significantly over the past five years, with negative returns in 2021. However, there was a recovery in 2022 and 2023. The negative ROA in 2021 could indicate that CarGurus Inc faced challenges in generating profits relative to its total assets.
Return on total capital:
- CarGurus Inc's Return on Total Capital shows variability, with a peak in 2021 and a subsequent decline in 2022 and 2023. This ratio indicates the ability of the company to generate profits from all capital invested, both equity and debt. The fluctuations could be attributed to changes in the company's capital structure and operational performance.
Return on equity (ROE):
- ROE also shows fluctuations over the years, with a notable negative return in 2021. This negative ROE suggests that CarGurus Inc struggled to generate profits for its shareholders during that year. However, there was a recovery in 2022 and 2023, indicating improved profitability relative to shareholders' equity.
In conclusion, while CarGurus Inc's profitability ratios have shown variability over the years, the company should focus on improving its operational efficiency and capital utilization to sustain and enhance profitability in the future.