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CarGurus Inc. (CARG) -52-WEEK RANGE : $19.24 - $36.54Investment firm Needham is making some ambitious projections and have upgraded CARG to Buy post 2Q earnings that checked the boxes from their preview.$38 price target represents an EV/EBITDA multiple of 21x our '22 estimate."We turn positive as we think CARG's base business is not getting the credit it deserves and is likely close to a bottom given its subscription model. We believe CarOffer has ample growth runway given its current installed base vs CARG's US paying dealer count. CARG integrating themselves beyond the sales floor of a dealership is happening at an opportune time, just ahead of their digital retail launch.Using consensus metrics CARG's EV/EBITDA multiple is at the low end of its historical range, while its business transforms and increases momentum, which we view as a disconnect that is unlikely to last, as such we upgrade to Buy."[ATTACH=full]5614[/ATTACH]
52-WEEK RANGE : $19.24 - $36.54
Investment firm Needham is making some ambitious projections and have upgraded CARG to Buy post 2Q earnings that checked the boxes from their preview.
$38 price target represents an EV/EBITDA multiple of 21x our '22 estimate.
"We turn positive as we think CARG's base business is not getting the credit it deserves and is likely close to a bottom given its subscription model. We believe CarOffer has ample growth runway given its current installed base vs CARG's US paying dealer count. CARG integrating themselves beyond the sales floor of a dealership is happening at an opportune time, just ahead of their digital retail launch.
Using consensus metrics CARG's EV/EBITDA multiple is at the low end of its historical range, while its business transforms and increases momentum, which we view as a disconnect that is unlikely to last, as such we upgrade to Buy."
[ATTACH=full]5614[/ATTACH]
