A brewing war in Eastern Europe and soaring inflation have rattled the stock market. But IBD 50 list member CarGurus is defying gravity and trading well above both its 50-day and 200-day lines. It plans to report fourth quarter earnings on Feb. 24 after the market closes. CarGurus stock is now trading about 1% below the 35.99 buy point from a first-stage double bottom that it cleared earlier.
CarGurus provides an online auto marketplace connecting buyers and sellers. Supply constraints have limited the number of new cars carmakers can put out. That's boosted used car sales significantly over the past year.
CarGurus Stock Gains Tied To Smart Search
The company says on its website that "CarGurus' search is powered by complex mathematical algorithms built over many years. These algorithms analyze data on millions of car listings every day."
Among its key ratings, CarGurus owns a 92 EPS Rating of a best-possible 99. And its 89 Relative Strength Rating shows its stock is outperforming 89% of stocks. CAN SLIM investors looks for companies with an RS rating of at least 80. Market research shows that companies in that group often go on to break out to fresh highs.
Unlike most stocks, even some top-rated ones, CarGurus stock earns a B Accumulation/Distribution Rating, on an A+ to E scale, reflecting strong buying by institutional investors.
Last quarter, CarGurus posted just 3% EPS growth, to 38 cents. But that mild growth came on the heels of EPS gains of 88%, 74% and then 116% the prior three quarters. Revenue in its latest quarter hiked 52% higher to $222.9 million.
Full-Year Estimates Revised Upward
Analysts are looking for earnings-per-share to dip 6% on a year-over-year basis for the fourth quarter, and 35% growth for the full year. Estimates for the full year were recently revised upward. CarGurus stock fell 2.7% Thursday amid the market rout. It's still up about 24% in about three-and-a-half weeks.
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CarGurus stock has a 95 Composite Rating and holds the No. 1 rank among its peers in the Internet-Content industry group. Alphabet and Renren are also among the group's highest-rated stocks.
Be aware that jumping into a stock right as it gets ready to report means you likely won't have enough time to build a profit cushion before the release. That leaves you exposed to a sudden and perhaps sharp drop if the company doesn't deliver the type of numbers analysts were expecting. You can minimize your risk by waiting to see the actual numbers and the market's reaction.
Note: Dates for earnings reports are subject to change. Check the company's website for any updates.
