What Makes CarGurus (CARG) a New Strong Buy Stock

Core Viewpoint - CarGurus (CARG) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. CarGurus Earnings Outlook - For the fiscal year ending December 2024, CarGurus is expected to earn $1.62 per share, reflecting a 31.7% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for CarGurus has risen by 19.5%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of CarGurus to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10].