CarGurus

CarGurus reported second-quarter revenue of $250.97 million, up 7.2% year-over-year, while earnings per share came in at $0.66 compared to $0.57 a year ago. Revenue exceeded the Zacks Consensus Estimate of $249.43 million by 0.62%, and EPS beat the consensus of $0.62 by 6.45%. The company's total paying dealers reached 34,629, slightly below the analyst estimate of 34,937, with U.S. paying dealers at 26,151 versus an expected 26,297 and international paying dealers at 8,478 versus an expected 8,640. Consolidated quarterly average revenue per subscribing dealer was $6,771, above the $6,756.05 estimate, driven by U.S. QARSD of $8,134 versus an $8,089.57 estimate and international QARSD of $2,568 versus a $2,533.41 estimate.

StockStory identifies CarGurus and EXL as two small-cap stocks with strong potential, while naming Resideo as one to avoid. CarGurus, a digital auto marketplace, boasts an 88.4% gross margin and 32.5% annual EPS growth over three years, with improving free cash flow. EXL, a data analytics and AI solutions provider, achieved 17.2% annual revenue growth over five years and expanded its free cash flow margin by 5.2 percentage points, with EPS growth of 21.4% outpacing revenue gains. In contrast, Resideo, a home comfort and security products company, saw its free cash flow margin shrink by 20.7 percentage points over five years and posted slower 7.5% annual revenue growth, signaling capital consumption and waning returns.

CarGurus shares rose 3.7% after the company announced it will require dealers to disclose fees on all used vehicle listings starting July 14. The policy expands its all-in pricing initiative, and any listing without disclosed fees will receive a 'No Rating' and lower search ranking. Investors viewed the move toward greater fee transparency as a positive step that could build consumer trust and enhance the user experience. The change comes as a CarGurus mid-year report noted that while new-vehicle sales were down 1.4% from the previous year, average prices rose 3.3%, suggesting resilience in the auto market. After the initial pop, the shares cooled to $34.03, up 3% from the previous close.

CarGurus released its 2026 Mid-Year Review showing used hybrid prices reaching an all-time high of $38,800, up about 11% so far this year, while the average new car list price reached $50,900 this spring, up 3.3% since December. Full-size luxury SUVs priced above $80,000 are clearing lots in under 30 days, with the Cadillac Escalade averaging about $122,000 and the Toyota Sequoia averaging $84,000, turning about 16% faster year-over-year. The share of used car sales for models over seven years old has grown from 32% in 2020 to 40% today, with high-mileage trucks like the Ford F-150, Chevrolet Silverado 1500, and RAM 1500 averaging around $20,000 and over 120,000 miles. Used hybrid sales are up nearly 34% year-to-date, led by the Toyota Camry Hybrid, Honda CR-V Hybrid, Jeep Wrangler 4xe, and Toyota RAV4 Hybrid, while used EV demand concentrates in the $25,000 to $31,000 range. The report highlights a market where $50,000 has become the norm for new vehicles and buyers are increasingly willing to compromise on age and mileage for value.