CarGurus (CARG)

Operating profit margin

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	32,627	108,478	148,268	97,756	34,322
Revenue	US$ in thousands	916,367	1,656,550	951,443	551,428	589,606
Operating profit margin		3.56%	6.55%	15.58%	17.73%	5.82%

December 31, 2023 calculation

Operating profit margin = Operating income ÷ Revenue
= $32,627K ÷ $916,367K
= 3.56%

CarGurus Inc's operating profit margin experienced a noticeable decline in profitability over the period from 2019 to 2023. The operating profit margin stood at 5.83% in 2019, subsequently increasing to 17.73% in 2020, reflecting a strong performance. However, there was a significant drop in profitability in 2021, with the operating profit margin decreasing to 15.58%. This downward trend continued in the following years, with the operating profit margin dwindling to 6.55% in 2022 and further decreasing to 3.57% in 2023.

The declining operating profit margin suggests that CarGurus Inc faced challenges in managing its operating expenses relative to its revenue generation. It is important for the company to closely monitor and control its costs to improve profitability and efficiency in its operations. Additionally, CarGurus Inc may need to reevaluate its pricing strategies, cost structures, and operational efficiencies to enhance its operating profit margin and ensure sustainable growth in the future.