CarGurus (CARG)

Return on equity (ROE)

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
Net income (ttm) US$ in thousands 20,972 -42,814 -43,023 42,111 32,676 75,374 71,896 73,544 81,588 86,427 96,802 106,793 106,434 101,965 105,329 84,408 77,553 65,561 43,382 42,258
Total stockholders’ equity US$ in thousands 541,689 483,473 452,073 568,362 616,852 716,994 700,854 695,808 734,609 577,931 461,835 464,865 516,841 589,256 549,181 508,655 373,586 338,259 295,855 277,968
ROE 3.87% -8.86% -9.52% 7.41% 5.30% 10.51% 10.26% 10.57% 11.11% 14.95% 20.96% 22.97% 20.59% 17.30% 19.18% 16.59% 20.76% 19.38% 14.66% 15.20%

December 31, 2024 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $20,972K ÷ $541,689K
= 3.87%

CarGurus' return on equity (ROE) has exhibited variability over the period from March 31, 2020, to December 31, 2024. The ROE started at 15.20% in March 2020 and showed fluctuations in subsequent quarters, reaching a peak of 22.97% in March 2022. However, there was a notable decline in the ROE to 5.30% by December 2023.

The ROE continued to fluctuate and turned negative in the second quarter of 2024, with values of -9.52% and -8.86% in June and September 2024, respectively. However, there was a recovery by the end of the year, with the ROE improving to 3.87% in December 2024.

Overall, the downward trend in ROE from 2022 to 2024, with instances of negative ROE, indicates challenges in generating sufficient profits relative to the shareholders' equity. This trend suggests potential issues with profitability and efficiency in utilizing the company's equity to generate returns for shareholders. Analysis of the factors impacting profitability and efficiency may be necessary to address the declining ROE and improve the company's financial performance.