CarGurus (CARG)
Return on total capital
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 147,913 | 69,182 | 54,791 | 35,772 | 20,810 | 78,843 | 84,662 | 90,574 | 103,105 | 115,115 | 126,114 | 140,548 | 139,291 | 126,542 | 133,222 | 106,713 | 96,136 | 77,930 | 44,067 | 38,906 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| 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 |
| Return on total capital | 27.31% | 14.31% | 12.12% | 6.29% | 3.37% | 11.00% | 12.08% | 13.02% | 14.04% | 19.92% | 27.31% | 30.23% | 26.95% | 21.47% | 24.26% | 20.98% | 25.73% | 23.04% | 14.89% | 14.00% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $147,913K ÷ ($—K + $541,689K)
= 27.31%
CarGurus' return on total capital has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The data indicates an upward trend in return on total capital from March 31, 2020, to June 30, 2022, with percentages ranging from 14.00% to 30.23%. This suggests that CarGurus was effectively utilizing its total capital to generate returns during this period.
However, there was a notable decline in return on total capital in the latter part of 2022 and throughout 2023, reaching as low as 3.37% by December 31, 2023. This may indicate challenges or inefficiencies in the company's capital allocation and operational performance during that time.
The return on total capital showed a recovery in the following periods, reaching 27.31% by December 31, 2024. This improvement suggests that CarGurus may have implemented strategic initiatives to enhance its efficiency and profitability in utilizing its total capital.
Overall, analyzing the return on total capital provides valuable insights into how effectively CarGurus is leveraging its capital base to generate returns for its stakeholders and highlights the company's performance in capital efficiency and allocation over the specified period.
Peer comparison
Dec 31, 2024