CarGurus (CARG)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 20,972 | 31,104 | 84,387 | 109,244 | 77,553 |
| Total stockholders’ equity | US$ in thousands | 541,689 | 616,852 | 734,609 | 516,841 | 373,586 |
| ROE | 3.87% | 5.04% | 11.49% | 21.14% | 20.76% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $20,972K ÷ $541,689K
= 3.87%
CarGurus' Return on Equity (ROE) has displayed a declining trend over the years, as evidenced by the data provided. The ROE stood at a healthy 20.76% as of December 31, 2020, reflecting strong profitability in that year. However, the ROE continued to decrease to 21.14% by December 31, 2021, indicating a slight improvement.
Subsequently, the ROE experienced a notable decline to 11.49% by December 31, 2022, suggesting potential challenges in generating returns for shareholders. This trend continued as the ROE further decreased to 5.04% by December 31, 2023, and dropped even lower to 3.87% by December 31, 2024.
The decreasing ROE figures indicate that CarGurus' profitability relative to its equity base has been diminishing over time. This trend may raise concerns about the company's efficiency in utilizing shareholder equity to generate profits. Further analysis of the company's financial performance and factors impacting its return on equity would be essential to understand the underlying reasons for this declining trend and to develop strategies for improvement.
Peer comparison
Dec 31, 2024