CarGurus (CARG)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 147,913 | 32,627 | 111,362 | 149,360 | 82,520 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 541,689 | 616,852 | 734,609 | 516,841 | 373,586 |
| Return on total capital | 27.31% | 5.29% | 15.16% | 28.90% | 22.09% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $147,913K ÷ ($—K + $541,689K)
= 27.31%
CarGurus' return on total capital has shown fluctuations over the years. Starting at 22.09% on December 31, 2020, it increased significantly to 28.90% by December 31, 2021, indicating improved efficiency in generating returns from the company's total capital. However, there was a sharp decline to 15.16% by December 31, 2022, suggesting a potential decrease in profitability or capital utilization efficiency.
By December 31, 2023, the return on total capital further diminished to 5.29%, a substantial drop from the previous year, indicating the company may be facing challenges in utilizing its total capital effectively to generate returns. However, the ratio rebounded to 27.31% by December 31, 2024, showcasing a strong recovery and potential improvement in capital efficiency during that period.
Overall, CarGurus' return on total capital has displayed volatility, with a mix of positive and negative trends. It is essential for investors and analysts to closely monitor this metric, as it provides insights into how well the company is utilizing its total capital to generate returns for its stakeholders.
Peer comparison
Dec 31, 2024