Which Automobile Dealership Stock is a Better Buy? By StockNews

Given the rising demand for new and used cars to avoid public transport amid the resurgence of COVID-19 cases, auto dealers CarGurus (NASDAQ:) and Shift (SFT) should benefit in the coming months. But which of these stocks is a better buy now? Let’s find out.CarGurus, Inc. (CARG) in Cambridge, Mass., and San Francisco’s Shift Technologies, Inc. (SFT) are two prominent players in the auto dealership space. CARG operates an online automotive marketplace that connects buyers and sellers of new and used cars and related accessories with dealers in the U.S., U.K., Canada, and Germany, using proprietary technology, search algorithms, and data analytics. SFT provides an end-to-end auto e-commerce platform for buying and selling used cars.

Because a global semiconductor chip shortage is forcing automakers to reduce new vehicle production, the auto industry has of late witnessed a surge in demand for used cars. The demand for new vehicles is also on the rise. And consumers’ desire to avoid public transport amid the resurgence of COVID-19 cases should keep driving the demand for cars in the coming months. The global Automotive Dealer Management Systems (DMS) market is expected to grow at 6.8% CAGR to $5.58 billion by 2026. So, both SFT and CARG should benefit.

While SFT’s shares have gained 4.2% in price over the past three months, CARG has surged 10%. CARG is a clear winner with 8.6% price gains versus SFT’s negative returns in terms of the past month’s performance. But which of these stocks is a better pick now? Let’s find out.

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