CarGurus Inc. (CARG) stock is surging 7.87% in pre-market trading on Friday, following the company's impressive first-quarter earnings report and optimistic second-quarter guidance released late Thursday.
The online automotive marketplace reported Q1 adjusted earnings of $0.46 per diluted share, surpassing both the previous year's $0.34 and analysts' expectations of $0.44. While revenue for the quarter slightly missed estimates at $225.2 million, it still showed growth compared to $215.8 million a year earlier.
Investors are particularly encouraged by CarGurus' strong Q2 outlook. The company expects adjusted earnings of $0.52 to $0.58 per share on revenue of $222 million to $242 million, exceeding analysts' projections of $0.47 per share and $233.2 million in revenue. This positive forecast, coupled with JP Morgan raising its target price for CarGurus from $34 to $36, is driving the stock's pre-market rally. The upbeat sentiment suggests growing confidence in CarGurus' business model and future prospects in the competitive online car marketplace sector.
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