What happened

Less than a month after the stock sank to near its all-time low, shares of online auto marketplace CarGurus (CARG -1.84%) rocketed back up in the wake of a solid Q3 earnings report. For the month of November, shares were up 19.4%, according to data provided by S&P Global Market Intelligence. 

But investors needn't fear they've missed the boat. Even with November's gains, shares are still almost 30% below their September 2018 high.

A man holding a tablet computer touches the icon of a car

CarGurus has become the top online car marketplace. Image source: Getty Images.

So what

As the largest U.S. online automotive marketplace, CarGurus benefits from its size: The more potential buyers who visit the site, the more eager dealerships are to list their cars there. CarGurus also prides itself on offering a wealth of information about each vehicle -- far more than you'd expect an online listing to provide, including photos, ratings, and pages and pages of user reviews -- to help ease customers' concerns about the buying process.

Dealers have been responding. In Q3 2019, subscription revenue from dealers jumped 28% year over year to $135.5 million. Advertisers, smelling opportunity, have also been climbing aboard, with ad and other revenue up 13% over the prior year to $14.9 million. All this new revenue powered adjusted net earnings to $15.5 million, a 37.2% increase over Q3 2018. 

In the two days following the report, shares were up 11.2%, and they continued a slight rise throughout the month. 

Now what

CarGurus has done an excellent job of leveraging its platform in the U.S., and has now set its sights on overseas auto markets. In Q3 2019, the number of international dealers on the site nearly doubled from the year-ago quarter, while international visitors increased by 129%. Even so, international users represent only about 21.1% of the site's clientele, so there's lots of room to grow. 

Although it's a young company, CarGurus has come a long way in a short time to establish its market-leading position. Continued growth seems likely, and it looks like there's still time to hop on board.